Teaching Your Children About Money

Harris says she used to throw away pennies she found around the house. But she understands now that even that simple act teaches a lesson about how much she values money. "Everything emanates with the parents," she says. "Spiritual, moral, sexual, financial lessons all begin at home. The most important lesson we can give our kids is to appreciate and respect money ourselves."

RELATED ARTICLE: 8 WAYS TO TEACH CHILDREN ABOUT MONEY

1. GIVE CHILDREN AN ALLOWANCE. Make sure the child holds up his or her end of the deal by completing his or her chores--taking out the trash, washing dishes, mowing the lawn--before you give a weekly stipend. The purpose of an allowance is to teach children responsibility as well as reward them for a job well done.

2. ESTABLISH A SAVINGS ACCOUNT. Start your kids off with a piggy bank. When they collect enough change, take them to the bank to make a deposit. Open a savings account and let them keep the bankbook so they can watch their money grow.

3. MAKE THEM PAY THEIR OWN WAY. Many parents give their college-age children credit cards for emergencies and bail them out when the bill gets out of control. That's a surefire way, experts say, to set your children up for a lifetime of financial trouble. Instead of picking up the slack, help your young adults devise a plan to get out of debt.

4. GIVE FINANCIAL GIFTS. Children always get toys, clothes and games for birthdays and special occasions. But try a gift that will ensure their future--bonds, mutual funds or stocks. Choose a stock that they'll enjoy following--McDonald's, Hasbro or Disney. Encourage relatives and friends to do the same.

5. TEACH THEM TO BUDGET. As soon as children can add and subtract, they're ready to begin learning how to keep a budget. Give them a notebook and have them record what they earn each week, what they save and what they spend.

6. CONSIDER DEBIT CARDS. Debit cards only allow users to withdraw money from a set amount of funds (usually a checking account). When that money is gone, the card will be denied, and you won't be able to access the account until there's been a new deposit.

7. SHOW THE VALUE OF GIVING. Just as important as teaching children about saving and managing money is teaching them to give money to people and organizations in need. Encourage them to set aside money for church donations and let them accompany you on trips to help charities.

8. BE A LEADER. One study found that more than 80 percent of people learn about money management from their families. Make sure the example your children follow is a good one.