Lesson Plans

Sunday, April 15, 2007

There's no right way to teach all kids about money, the experts say, and parents should feel free to invent the systems and games that work for them. But there are a few basic things you can do to impart valuable financial lessons to your children.

· Always be on the lookout for a "teachable moment." At the ATM or in line at the grocery store, explain that the money you're getting or spending is money you earned.

· For younger kids, keep it simple. Young children learn best in a few short lessons. Do it over and over, and start when they're toddlers.

· If you give an allowance, consider tying it to chores around the house to reinforce the notion that money is earned. Tell kids that they can have it but that they don't get it free.

· Make it a fundamental rule that a portion of allowance always goes into savings. Try 10 or 20 percent. Put spending money and saving money in different places. Earmark a portion of savings for charity.

· Talk about your finances, at least as much as you are comfortable. Using play money to help explain works well. It doesn't have to be done in a way that worries the child; he will probably want to help.

· Let your kids make mistakes with their money early on. If a child earns $50 in a month from babysitting and insists on spending it all at once, let it happen. But when that same child wants something else later and doesn't have any money for it, bring up the earlier decision to spend everything on one item.

· Explain the power of compound interest. Kids have something powerful on their side: time. The earlier they start to save, the more money they'll have later.

-- Margaret Webb Pressler

© 2007 The Washington Post Company