<b>By Owen K Hand and H Ronald Tanner, CFP</b>

Starting your children off with the right view of finances is so important these days — especially when debt seems to be a common way of life for so many. We can, however, change the way our own children look at money. Here are some important lessons to teach your children about their money:

<b>1. Money Does Not Grow On Trees. </b>Children do not understand, at least not at first, that there is not an unlimited supply of money at the bank, or on the credit card. Explain to them the process that they can only buy what you have money to pay for.

<b>2. Saying “No” To Some Unnecessary Things</b>. One of the most valuable lessons a child can learn is to willingly choose to say “No” to some purchases — even if they want it. Do not give them money every time they want it — this teaches them that there is a bottomless supply, when there isn’t.

<b>3. It Is Important To Save.</b> Besides saving for something that they really want, which is a good reason in itself, teach children to save for unexpected things. For instance, if they receive a regular allowance, or, are working after school and earning some money on their own, teach them to put aside a regular percentage, say 10% to 15%.

<b>4. Establish A Budget. </b>Once your child is receiving a regular amount of money, you will want to show them how to plan for a wise use of that money. Help them to know how to set money aside for basically three different things: money to spend now, money for special purchases that require savings, and long-term savings.

<b>6. Teach Them About Credit Cards. </b>Credit cards and checking accounts are similar in that they provide ease of purchase, but without the necessity of carrying cash. Your children only see you handing over the plastic, or another piece of paper. But they never see that cash is involved, it is behind the scenes to them. Show them how that you must pay monthly for both and that you should never buy more than what you can afford — except for some larger purchases — because the bills for it will come!

<b>7. Give Regularly To Good Causes. </b>Probably one of the greatest joys that a child can have in the use of their own money is the joy that comes from willingly giving their money to causes greater than themselves. By learning to give some of their money often to causes such as their church, or a charity, they learn that their money can be a blessing to others.