Leading by example is perhaps the best tool you can give your child. You have to teach your child that “living within your means” is highly important. You have to teach them that credit cards are for convenience, not a way to live beyond your means. You should not exclude them for discussions about money- it is not taboo: the more you include them in your decisions about money the more they will learn the importance of good judgment when it comes to money in their life.
I paid (and pay) for my children’s college education but am quite strict with them when it comes to spending money. It is not that I cannot spend on them, but I would rather have them grow up as responsible adults. My older daughter, who is working, but still lives at home, takes care of most of her expenses. If I am paying her telephone bill or incurring any expense exclusively for her, however small the amount may be, I make sure she gives me back the money, just so that she feels responsible about her own life. My younger daughter who is in college in Boston gets a spending allowance and has to manage her life within the allowance. She is back in Boston for the summer, as she wanted to work during her break- she is fending for herself through the summer through her earnings. This summer stint will be a valuable lesson for her- she earns, she spends, she saves and she learns all about balancing the books. If she manages to save some money now, that will give her some extra spending money when the semester starts. In my own way, I am letting go and letting them get fiscally prudent. You can do it too- start young and keep at it! It will be one of the most valuable lessons you can give them.