Very few people, especially teenagers, enjoy the budgeting process—it's time consuming, tedious and forces self-discipline. Creating and maintaining a budget helps your child understand the basic concepts of income, expenses, saving and debt.

Create a spreadsheet and list on a monthly basis:

• Sources of income—Your child cannot spend more than that for the month without going into debt or overdrawing a checking account.

• Fixed expenses—List car insurance, phone bills, car payments, Internet service, etc.

• Discretionary expenses—Ask your child to spend one week recording all the ways they spend money.

Use that information to create your child's budget. Discover a process of accountability that works for you. Don't expect a detailed report on a weekly basis. Be sure to check in to make sure the budget is maintained.

When the first year rolls around, your child will be able to rely on some budgeting principles that will encourage responsibility. The budget that worked in high school may need to be revamped for college. Offer to help but let your child assume responsibility.

Remember to be flexible. Adjusting to college is tough for every child. The budget may take a beating for a few months until the right books have been purchased, the malls take their first markdowns, and the cheaper coffee shop is discovered.

Credit cards are a huge temptation for a student on a tight budget. The time to talk about using credit responsibly is before your child turns 18 and the applications start arriving in the mail. Come to an agreement on how credit cards should be used, whether it's for convenience or for emergencies only. Warn against charging extravagant purchases or using them regularly to spend beyond a budget. The high interest rate and the way it's calculated can land your child in serious debt in no time.

The first year away may be the first time your child files a tax return. Help your child out by suggesting what financial records are important to keep. Offer a method of organizing the paperwork. Buy the file folders and boxes and send them with your child to school. If the right framework is in place, it will be a lot easier for your child to follow through.

Once your child is in college and faced with an abundance of financial decisions, the lessons and habits you helped to develop should make it easier to avoid the usual financial pitfalls of freshman year. Remember, maintaining a budget is a lifelong learning process. Don't expect too much or too little from your child. Always be available to help, which doesn't always mean sending more money.