How to Teach Your Kids Money Basics You think your kids don't listen to you, right? Well, according to a survey by the American Savings Education Council (ASEC), when it comes to money matters, children do listen to parents! A recent survey found that 69 percent of teens learned how to manage their finances from their parents. Like it or not, your kids rely upon you to set positive examples and be proactive in teaching them about money. Here are some simple and effective ways to teach your kids the basics of personal finance. Make Money Fun for Little Ones If you begin your children's financial education early, you can increase its complexity as their understanding grows. Preschoolers can start learning valuable money lessons with a few simple games. For example, let your child set up a "store" with toys or groceries for sale. Take turns playing shopkeeper and customer, giving your child the opportunity to mark items with price tags and use real money to make a "purchase." Take your little ones to the supermarket and have then be your "assistants," putting them in charge of tracking coupons and spotting sale items. As you walk through the aisles, let them guess how much things cost. After you've checked out, you could let your children keep the coupon savings as a reward for their help. Get Older Kids Involved As children mature, they should be given more responsibility and take a more active role in household money matters. Make it a point to discuss family finances openly and honestly with your children. You don't need to reveal your net worth, but you should explain your family budget and make your kids aware of monthly expenses, such as the mortgage, car payments, savings, college fund, and food. When your family is making a major purchase, such as a vacation or a car, get your kids involved in the decision making process. If they vote Ferrari and a Ford fits your budget better, explain in detail why their choice isn't financially feasible. Encourage Saving at Every Age A great lesson anyone can learn about money management is to pay yourself first. Kids of all ages should be saving part of their allowance, birthday money, and earnings from work. As soon as your children have enough money saved for minimum deposits, take them to open a savings account. This field trip will help them realize the importance of saving and will make them feel special and grown up. Many financial institutions even offer special accounts geared toward children. Consider matching a part or all of what they save. Another tip for instilling financial discipline is to have your children keep "money logs" in which they record exactly how they spend, save, or share their money. These logs can be used to track expenses and plan for big purchases, such as a bike. You could even offer an allowance bonus for a well-kept and detailed log each week or month. Learning to record exactly where their money is going will help your children become financially responsible adults.

Use the Internet as a Teaching Tool There are a number of sites that can teach children to save and shop wisely. Many credit unions and banks have interactive sites designed to educate young people about money. Although geared toward children, the sites also include information to help parents play a positive role in their child's financial future. For younger children, the government's website, http://kids.usa.gov/, has some interesting money basics. Set Examples Every Day Children learn by observation, so remember to be a role model for your kids by practicing sound money habits yourself. When you've gotten a great bargain, tell your children about it, and encourage them to do the same. When it comes to finances, your kids will mirror your attitudes and actions. Set a positive example, and your children will be well on their way to sound financial futures.

Adapted from unbiased financial information provided by Financial Finesse.

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