Teaching kids about finances

The reason some adults fall unto hard times and have a lot of debt is because they were not properly taught how to save and how to manage finances.

Kids should start learning about money and finances at a young age. This will probably discourage the "I want this, I want that..." begging parents constantly hear, and outlandish spending habits as an adult.

Here are some important steps to take with your children at a young age, so they will become more financially savvy adults when they are handling, earning, and saving their own money.

(1) At a young age, get your child a piggy bank. Teach your child what a dollar (or pound) is, and explain the value of each coin. Add some money to your child's piggy bank.

(2) When your child is old enough to read and understand numbers, open up a savings account with your child. Explain to your child that this is their very own account, and teach them about saving money. Many adults use online banking, but I would suggest using an "old fashioned" bank book or check register, and help them write in their deposits, and show them how much they are saving.

• Some banks have kids clubs, and may offer a free incentive, or toy, for joining.

(3) Get your child their very own calculator. Teach your children how to add their deposits to their current saving account balance.

(4) Actually go to the bank with your child. Many adults have direct deposit, online banking, mail in deposits, and may hardly ever visit a bank! Even when you child only has one or two dollars to deposit, make a special visit to the bank (when you are out with your child or doing errands anyway), and help your child make the deposit and reiterate the importance of saving.

(5) Equate an allowance with the accomplishment of a chore. Instead of just giving your kids money, teach your kids to earn money. This can simply be cleaning their room, helping with the dishes after dinner, vacuuming, or whatever household chore your children can be trusted with.

(6) Teach children to save some money they receive from gifts. Parents decide how money given to a small child from Grandma or Grandpa, or other relatives, is spent. As your child gets older and starts to understand what money is, teach them to save some and spend some on themselves for a present.

• For example, let's say your child receives $30 for their birthday. Teach them to save $10 in their savings account, and $20 can be spent on books or a toy.

(7) Explain that money does not grow on trees. Explain to your children that you make a limited amount of money, and then bills needs to be paid - utilities, food, car expenses, mortgage or rent, school supplies, and clothes. Do not burden them or overwhelm them with the numbers (they are still kids, after all), but an explanation about family finances teaches them that parents do not have an endless supply of money. Teach your kids that lights need to be turned off when they are not using them because electricity costs money $$$, is a valuable lesson.

(1) It is important to teach teenagers how to economize at home. You can start by teaching your teenagers about coupons and explain to them about the economy. A discussion on the high price of gas will inform your child why they cannot borrow the car and take a two hour joy ride.

(2) Encourage your teen to get a part time job, and start saving for their future. Instead of playing video games for hours on end on the weekend, they can start working and start saving for college.

If children understand finances and the value of saving money at an early age, they will most likely avoid debt and financial struggles as an adult. As parents, it is important to find the time to teach your children how to be frugal and save at a early age, and how to spend money wisely.

Teaching your kids about family finances and your perspective of money will help them to be responsible, aware of the value of money, and instill in them lifelong lessons of planning and saving. $$$