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Experts believe that parents should start teaching their children how to be money savvy as early as 5 years old.

Initially these lessons have to be very basic with the intent to develop a sense of value and how transactions are conducted. As time goes on, kids can learn money management.

There are numerous websites and computer games to re-enforce these lessons. An allowance can also be a valuable teaching (and leveraging!) tool. Part of the earnings should be allotted for immediate needs with the other put toward long term goals, therefore establishing savings skills. Sometimes even matching their savings can be a good idea – like a 401(k) plan.

Older children need a sense of financial responsibility by understanding their own expenses. Cell phones are a great example. Does your teen know just how much their cell bill costs each month?

Thirteen is a good age to explain how to start saving for their first car. Put together a 3 – 4 year savings plan. Map out a hypothetical plan of how much has to be saved and how to achieve that plan, step by step. Tell your teen what portion you’re willing to contribute … but only toward the purchase of the vehicle.

Teach Your Kids About Money By …

Introducing them to money as soon as they can count

Communicating your values concerning money --- how to save and how to spend it wisely

Teaching the differences between needs, wants, and wishes

Setting goals which helps children learn to become responsible

Introducing the value of saving versus spending

Taking them to a bank to open their own savings accounts

Keeping good records of money saved, invested or spent

Using regular shopping trips as opportunities to teach children the value of money.

Allowing young people to make spending decisions - whether good or bad

Showing them how to evaluate ads for products

There are countless ways to teach your children how to handle money.

The main thing is to do it early and often!  All parents can create teachable “money moments” in entertaining and creative ways. It just requires a little forethought and effort. The best part? The payoffs are bound to be enormous!

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