by Casual Writer

Created on: April 19, 2009

It is normal that parents want their children to be happy. One factor in happiness is money. Money not in itself, but the choices in life money can buy. Financially well off individuals have more choices in life than those with debt or little money. Those who have no debt and sufficient amounts of money in the bank rate themselves as happier. Having money does not equate to a happy life, but it certainly can help with the pursuit of the things that can contribute to happiness.

Here are several concepts parents can teach their children to create wealth and be money smart:

- Cutting recurring expenses result in big savings. For example, $3 for a cup of Starbucks coffee is not a lot of money. But $3 spent every single day in one year adds up to $1095!

- The same goes for saving - saving a small amount every day adds up to big money. $3 saved every day for a year adds up to $1095! Add to that compounded interest, and you make even more!

- The power of compounding interest. Money invested earning 8% per year will double in approximately every 9 years. $10,000 invested today will become $20,000 in 9 years, $40,000 in 18 years, $80,000 in 27 years, and so on. Compounding interest works over time. So teach them to start saving early. $100 invested every month earning 8% per year will become $1,000,000.00 in 40 years. That's only $48,000 invested!

- Choices have consequences. Allow children to make choices with their money. If an allowance is given, let them make choices with how to spend their money. If they make bad choices, and run out of money, don't give them more - let them deal with the consequences. Its OK if a child has $20 and spends it all on candy. But if they want to buy a toy, that would be too bad - they spent all their money on candy. Talk to them about their situation, and take the opportunity to teach them about making better choices in the future.

- Love is emotional, not material. Teach children the true meaning of love. Love means taking care of their needs: shelter, food, clothing, affection, protection from those that would do them harm. It means giving them your time, and comforting them when they are sad. Don't give them things in place of love. You'll only confuse them. They will equate material things with love. Giving material things does not mean giving love. Rather than teaching a distraught child how to console him or herself, many parents accidentally instill a lifetime of misery in their children by giving their children too many things. When

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