Helping Your Children to Be Money-Savvy
by Mia Cronan

Like many things in life, it takes parents' intervention to help children gain a full understanding of how money matters work. 

Many children seem to think that the coffers never run dry, and if they do, we just drive up to a machine, stick a card in, and money comes out. Neat! What they don't see is what happens behind the scenes, where Daddy and Mommy work very hard to bring the money home and make it stretch as far as they can. They also don't see us putting the money in that machine to begin with, so that there's something there to pop out when the card goes in. Why should they see it differently? They're children, and they go with what's apparent. That's what makes our role a challenge, and it can be a fun road to travel while your children learn about money management.

Recently, my daughter broke her favorite hairclip by playing rough with it, after she had been told several times not to. She shrugged her shoulders and said, "Well, we can just go out and buy a new one." She's right; we could do that. But based on principal and the fact that I had before me fertile ground for teaching a lesson, I said, "No, we can't do that." I went on to explain that we can't always just "go out and buy a new one," and that sometimes we have to make do with what we have. That includes caring better for the things we already have. She was hardly impressed with the imparting of my wisdom at this point, but I'm hoping that the lesson will gain merit with her maturity.

I remember years ago my father fighting with a toaster to get it to work, because he couldn't just "go out and buy a new one." That's the way things were, especially since he is a product of the Depression-era. Caring for and repairing what you had was a way of life, and they knew no other way. They would have been mighty surprised if they could see into the future and watch us dispose of the things that get a little scratched up or having a button missing.

Fortunately, children are innately curious; you can use that curiosity to your advantage. Here are a few ideas to help you guide your children down the right financial paths:

Start as early as age three! You might be surprised at how well a wee one can wrap his mind around money concepts. Children love numbers, so why not money number? That, in conjunction with their need to learn about delayed gratification, offers you a wonderful opportunity to teach them how it works.

At the grocery store:

· Talk about weighing fruit and paying based on how much it weighs. Compare price tags, and discuss how they are different and why. 
· Talk about picking produce so that what you buy is the best value for your money. The child will understand picking bananas with no brown spots, or choosing broccoli that's firm.
· Let your child help you hold the coupons, and explain to him how they help you save money. He can also help you keep them sorted. (Well, maybe.)

If you choose to give your child an allowance:

· A good age to start this would be around 5 or 6 years-old. You can even draw up a budget for your child so that he knows exactly what to do with the money and why. Three piggy banks or cups might be a good start, and he can place 1/3 of his allowance in each container. In this example, he might use one for spending, one for saving, and one for charity or helping someone in need.
· You may or may not want to pay extra for extra tasks done around the house. Whatever your stance on this is, you should have that determined and stick to the plan so that your child knows what to expect. 
· Consider starting a Family 401K program. For example, the child gives you "x" amount of money back from his allowance, and you double it for him. This teaches the value of saving, and it uses a real-world money management system. It also incorporates delayed gratification and self-discipline - two hard lessons to teach!

Have your child sit with you some evening while you pay bills.
· Here again, you may be surprised at the degree to which he grasps what you're doing. Explain how the checkbook represents your bank account, and every check you write depletes that account by the amount on the check. He'll learn a few things from this: Organized record-keeping, a little math, and how money changes hands for goods and services received.

The road to good money management can be gratifying for you and your kids, and I bet when they're older, they will thank you for taking the time with them now! 
Happy penny-parenting!

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