When's the last time you talked to your kids about money? Never? I hate to break the news to you, but the little sponges have probably already picked up a lot more dirt than you know.
With a little thought, though, you can come up with hands-on financial lessons that will leave your children with fond money memories and practical skills. Consider these strategies.
Make a mini-CPA: In these days of enlightened allowances, many families have children divide their weekly stipend into three piggy banks: one for spending money, one for savings, and one for charity. If that's too complicated, consider encouraging savings by offering a parental "match" for those dollars put in the bank, just like your employer does for your 401(k) contributions. When they are old enough, send them this link to encourage a little entrepreneurialism.
Teach in "real time": Every trip to the store or time spent paying bills is a "teaching moment." Yeah, I bristle at that phrase, too. On the other hand, all the lecturing in the world can be pointless. Abstract financial concepts are just that -- abstract -- when described in third person, after the fact. Particularly when Fear Factor is on in three minutes. Engage your kid in "real time" during your daily money chores so they'll see how the theoretical issues of savings, bill paying, and cursing out the MasterCard people actually work.
Be a broken record: Annoying? Yes. Does it work? Yes.
Consider an open-wallet policy: I often use my friend Kristen's family as an example of trusting and forward-thinking parenting. When each of Kristen's older sisters turned 13, they became responsible for balancing the family checkbook. In doing so, each learned what it cost to pay the mortgage, credit card bill, A/C, and repairs for the family's bright orange VW van. When Kristen turned 13 and was handed the checkbook, she got a dose of fiscal reality that stuck with her. To this day, Kristen, who now has two kids of her own, lives a life of financial integrity.
Instituting, and sticking to, a concrete money plan can get complicated in households where there is shared custody. Heck, getting on the same page about money matters may have sent you and your child's other parent to divorce court in the first place. Still, you can encourage consistent money rules in your household. Just let your child's other parent know how you are handling allowance and other money-related tasks. Maybe he or she will get a few good ideas.