Kids and money

January 5, 7:45 PMWilmington Parenting ExaminerJana Lynch

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The New Year brings a chance to commit ourselves to saving money and managing debt. In fact, these are two of the most popular New Year's Resolutions, according to www.usagov.com, along with getting a better job and reducing stress. While we are working on fixing our finances, it's a great time to teach our kids about money. Since statistics show that schools do a poor job of teaching finances and most high school graduates cannot pass a basic financial literacy quiz, the responsibility for teaching our children about finances falls on us as parents. Many parents use allowances as the foundation for teaching their children about money, along with birthday money and money received for holiday gifts. We need to teach our kids how to use that money properly so it works for them.

www.soundmoneytips.com offers these 7 essential financial lessons that we need to teach our children:

1.  Money can be exchanged for goods or services.
2. One should be careful with money.
3. Money has to be earned.
4. Encourage one-third savings, one-third donations, one-third spending.
5. Avoid borrowing money wherever possible.
6. Money isn’t your best friend so don’t let it control your life.
7. Show them how to budget & live within their means

Some other essential lessons that we need to teach our children, as recommended by Joseph Kenney at www.allthingsfrugal.com:

1. Money does not grow on trees
2. It is important to save
3. Comparison shop
4. Establish a budget
5. Give to good causes

I would be sure to include teaching your child about credit cards to that list. Credit cards can be a useful tool when used properly; when they are not, they are nothing but a dangerous, disastrous piece of plastic.

Depending upon the age of your child, there are different techniques for teaching your child about money. While preschoolers are old enough to sort coins and convert those coins into things, preteens (11-13) can start to learn about the stock market. Make sure you take your child's age into consideration when teaching them about money. Trying to teach them something that might be too hard to understand may not only confuse them, but frustrate them as well. Frustration may deter them from wanting to learn. (Find tips for teaching kids about money here and here)

For parents looking to education themselves a bit more before teaching their kids, the Delaware Money School (www.delawaremoneyschool.com) offers a variety of programs from Debt Management to Home Ownership and Mortgages to Planning for College. Classes are available at most local libraries or online through the Money School's website.

If you're looking for a money related activity, a game of Monopoly or LIFE couldn't hurt in your quest to make your kids fiscally responsible. Not only does it enforce a lot of the lessons, it's also a great way to spend time together as a family.