As a parent, one of your responsibilities is to teach your children how to be money smart. They need to learn what money is. And they need to learn how to wisely use it, save it and share it with others.

This article provides guidance on how to instill such awareness about money, as well as how to encourage your children not to put too much value on money.

* What is money?

When teaching your kids about money, you will realize that they will quickly show interest in this topic. You want to stress that money is a way in which items are exchanged, purchased and traded.

But you also want to be careful to teach them that money is not everything in life. We live in a society that puts way too much value on the almighty dollar.

Unfortunately, many children fail to realize that there are many precious things of value that money cannot buy: internal peace, a generous spirit and good moral choices. It is up to you to provide this message.

* How can you teach your kids to spend wisely and to save?

One of the best things you can do, when teaching money, is instill in your kids a core value that money is something they should earn, and that it should be spent and saved wisely.

As parents have done for centuries, it's wise to assign your children chores from a relatively early age, and pay them a small allowance for them.

Be careful not to overpay your kids, as they will get the mistaken impression that money comes very easily or with little effort. That is not a good impression for them to develop.

Next, teach your child a simple budget. Show them how they can save their allowance money to purchase something they would like. Encourage your child to save up for something.

One great thing to do is to set up a junior savings account for your child. Help your child learn to make weekly deposits into the account. You can teach them about interest that will accrue.

Since you are the parent and have a great deal of control, set some firm boundaries. While the money earned on chores is technically your child's, if the two of you have an agreement, do not let your child just blow the money.

And, do not let them get all of the things they want, and right when they want them. Instant gratification is not a reasonable expectation for those who are money smart. Do not foster that belief in your child.

* How can you instill a generous spirit in your children?

One really good thing to do is to encourage your children to give away 10 percent of their chore earnings. Explain why it is important to share with those who are less fortunate.

You can have some fun with this one. Help your child keep track of the money they want to give to others.

Then you can take them to a homeless shelter, for example, so they can give their money to the administrators there. That way, they can actually see the place where their money will be going, and some of the people it will be helping.

Instilling a generous spirit in your children is one of the greatest things you can do for them. For those who learn to share early in life, they will likely carry that attitude with them into adulthood.

It's fine to enjoy the money you work hard for, but it's equally important to have a genuine desire to share some of it, too.

Learn more about this author, Ann E. Smith.
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