Teach Your Kids About Money

CNN features a terrific article on teaching your kids the value of a dollar and a whole lot more. They remind us that children learn about money by watching us every day. Be sure to take this opportunity to model the right lessons for your child’s financial future.

Here’s a quick summary:

1. Don’t say “We can’t afford it”

Use the right language to teach your child about money. Help your children learn that they have choices about how to use the money they have. Use an allowance to help your child understand the concepts of spending and saving.

2. Show them the money

Use cash as much as possible and educate them on credit cards if and when you use them. Talk with them about your checking and savings account balances as well as any credit card balances or outstanding loans. Let them help you make payments and do simple bookkeeping.

3. Talk about how much things cost

Discuss today’s expenses with your child as they occur. Give your child ideas about money that they can understand, relating costs to values they can grasp. Children pick up a lot about finance just by discussing it regularly.

4. Buy something that isn’t on your list

Sometimes we need to be flexible and buy things off the list. Being smart with money can also mean spending wisely, taking advantage of a sale or capitalizing on an unplanned opportunity.

5. Be open with your spouse about money

Some partners hide spending to avoid criticism from the spouse. Kids learn distrust from this and that money is a secretive topic even within one’s own family. Take steps to foster the right kind of attitude about money in your child.

Here’s the entire article.