Teaching your children about financial responsibility is one of the most important financial tasks you can take on. In these difficult financial times, there is no time like the present to provide your children with a foundation of frugality and wise spending behaviors. The best way to teach your children financial responsibility is to lead by example. If you regularly purchase things you cannot afford and continue to carry large balances on your credit cards, those practices will be modeled by your children. Likewise, if you pay your bills on time and take time to work on your budget, your kids will be more likely to mirror those practices.
In the interest of teaching your children responsible habits, do not shelter them from financial discussions in your household. Let them listen to you and your spouse or partner come up with a game plan to save for a vacation or a new car, for example. Allow them to brainstorm with the family about ways you can save money to meet certain financial goals. Help them make sense of why things cost what they do and how you earn money to pay for those things. Providing children with an allowance gives them a great financial foundation. Set up a clear method of earning that allowance though helping with chores and other household duties. Earning an allowance teaches children the value of money and encourages a stronger work ethic. Many parents help their kids start a bank account, so they can help them learn how to set their own financial goals and save. It is never too early to provide your kids with lessons about conscientious spending habits and the value of money.
Credit cards are one of the biggest challenges parents confront while trying to instill good fiscal behaviors in older children. It is wise to provide your kids with lessons about credit cards before they can obtain a credit card themselves. It is a sad fact, but many companies send children applications for credit cards near high school graduation time. And walk on any college campus and you will see the plethora of advertisements and free give aways for student credit cards. Teach your children about credit cards early, so they can responsibly face the temptations of those offers and will understand how to manage their finances. Some parents introduce the concept of credit cards to their children by starting with a debit card. Since a debit card deducts the payment immediately from a bank account, it reinforces the idea that every person is accountable for what they spend. Some parents give their teenagers credit cards with the caveat that all statements be reviewed together each month. They stipulate that any balances have to be paid when the statement is due, lest the credit cards be taken away. If not handled responsibly, credit cards offer one of the easiest ways to accumulate debt. Teach your children about them early to protect their financial futures.

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