by Amela Piric

Created on: April 17, 2009   Last Updated: August 24, 2009

Expose your children to money management early on and let them learn from their experience. Otherwise, they will grow up as financially irresponsible adults without adequate skills to create a financially stable future for themselves. Teach them to save for college rather than get indebted as students since there are no guarantee for a job nowadays. Engage your children in important financial discussions at home by asking them for their advice and opinion. This will serve as a practical and real life lesson for your children. Talk to your children openly about economic crisis and how it is affecting the family budget.

Below listed are several suggestions that can help you instill smart money management skills into your kids early on.

1. Include your children in family's discussion about money

Engaging children in family's discussion about money will provide them with a perspective on how finances work in real life and how household is financially managed. They should learn early on that family budget has only so much money to cover each family member needs. Thus, they might be willing to sacrifice certain items that they initially wanted you to purchase for them on behalf of family financial security and savings. As an added benefit, your children will learn to develop a feeling of empathy and what it means to be a part of the family.

2. Talk to your children openly about economic recession

Explain to them that economic recessions happen from time to time and that it is important that we plan for them in advance. Inform your children that it helps to establish a savings or emergency fund when the times are good for these occasions such as today when the times are tough. Don't hide it from your children that you are struggling to have the ends meet. You can not protect your children from the harsh reality. Instill into them values of importance of saving and investing which will help them become crisis proof on time as crisis hit us every ten to twelve years.

3. Engage your children in your family business

If you have your own family business, make sure that your children are involved in it from the very early on. Serve as their mentor, oversee their work, and ensure that they are picking on skills necessary to run the business early on. Reward them for accomplishing the tasks you assigned to them with high quality. This experience will help them learn early on to appreciate the value of money. Thus, they will want to think through hard before deciding to buy something and spend their hard-earned money.

4. Have your children talk to their grandparents about the value of saving money

Arrange for your children to talk to their grandparents about the value of saving money. Let the grandparents explain to them how they got their first job, how difficult it was, and how much money they earned. That perspective from the old days will help children appreciate the value of dollar even more.

5. Teach kids to use cash rather than credit for purchases

Teach your kids early on to save up cash for buying an item they desire. They will spend less money and buy only what they really need. They will be less likely to waste their money on unnecessary things.

6. Teach your children how to save for their college education

Teach your children the importance of saving and investing money. Inform your children on time that it costs a lot of money to attend college and that it is only smart to start saving for it early.

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