Here are 8 simple solutions to help your child learn good money management habits to give him or her (and you!) a more financially secure future.1. Be a good role model. Kids always look to us as the example to copy. If you always are overdrawn, why expect your son set a budget? If you buy clothes impulsively why should you expect your daughter to wait for the sale? If you don't talk about the value of money, don't think your child is ever going to learn that money doesn't grow on trees. Be the model of money management you want your kids to copy.
2. Use real-life examples. Show your daughter how you balance your checkbook. Talk to your son how your credit rating is checked before purchasing that car. Show your kids the household bills so they know how much electricity, gas, water, phone and cable cost. You don't need to reveal your income or savings but you should use real opportunities to help your child understand money.
3. Don't give loans. Kids learn money management by trial and error. So don't bail her out if she “overspends” and runs out of money needed that week for the movie. If you do give an advance, consider charging interest. She'll soon figure out that borrowing is pricey. You can discuss pay for extra jobs, such as mowing the lawn or washing the car- especially if the child is saving for a big or special item.
4. Set a capped budget. Allocate a certain amount for expenses like a back-to-school wardrobe. As an incentive, explain that if there's money left over she can pocket it. Make your kid contribute to those nonessential “have to have items” like the trendiest sneaks or those pricey jeans. You can pitch in some, but he has to make up the rest (iVillage.com)
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