8 simple solutions to help your child learn good money management habits (Part 2)

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 (Part 2)

5. Give an allowance. One of the best ways for kids to learn to manage money and keep a budget is by giving allowances. How much to give depends on your child's spending habits and maturity, and your comfort level. And encourage your child to always save a portion of that allowance (as well as money that is a gift).

6. Keep a spending log. From the time your child can write and count, give him some kind of a simple recording book to keep track of his money. A young child can track his earnings (including holiday money gifts); an older child can record his earnings and expenses. Gradually explain the “break-even point” so your older child begins to learn the necessary skills for balancing a checkbook, keeping a savings account and maintaining a budget.

7. Teach smart buying habits. Encourage your child to read consumer reports online before purchasing that pricey gadget. Ask your daughter to list what she needs before hitting the mall, then stick to it. Tell your son to check the newspaper for sales. Let your child choose among items by comparing prices. Give your child a clothes budget by having her estimate costs, and then honor it.

8. Encourage an entrepreneurial spirit. Help you child set up that lemonade stand. Print flyers that say he'll mow the neighbors' lawns. Offer to baby-sit. Walk the neighbor's dog. Your child can learn from a young age that how you earn money is through hard work. Not only will you encourage your little entrepreneur but you'll also help him appreciate the value of money.

If you haven't taken your child to the bank to help him open up a savings account (for younger kids it can be a Holiday Savings Account) and checking for an older kid, write it down in your “To Do” list. The sooner our kids learn the value of a dollar, the most financially secure they will be. It's the one lesson we may not be teaching our kids and the one in today's economy they just may be needing the most (iVillage.com)