1. Life isn’t about stuff.  The most important lesson a child needs to learn to lead a healthy money life is that stuff isn’t the most important thing.  A great way to teach this to your children is to lead by example, and have conversations with your kids about what their perceptions of rich and poor are. It’s sometimes shocking what comes out.  Another way to instill this important principle is by giving gifts for birthdays & other special events that aren’t things but memories to make.   A family play day at a park, or hosting a sleep over for friends.
  2. Money is earned!  Kids have a completely abstract concept of money.  They need or want something and money appears to acquire whatever that something might be.  Instead of just purchasing something for your child make them earn it.  Everyday they make their bed, take out the trash, or put their toys away they earn money toward their new toy.
  3. You can’t always get what you want.  Instant gratification is not just a problem for children.  Many adults have to deal with it too.  This is why so many people end up with mountains of credit card debt.  Instead of buying them a new video game when they see it in the store make them wait a week and see if they still really want it.  Most of the time they have already forgotten about it.
  4. Save for big ticket items.  Too many adults rely on credit to buy a new big screen TV.  If they want a new bike have them save for it. Get your child a savings account. ING has a free one online.  See if they will start saving on their own, and as an extra incentive match what they save.  Every month sit down and look at how much they have saved, how close they are to their goal and how much interest they have earned.
  5. Have a rainy day fund.  My mother always said, “keep a quarter in your pocket so you can call home.” This is obsolete now, but the idea is still important.  This is a hard lesson to teach children since we want to make sure our children are taken care of.  But next time the unexpected happens, the air conditioner breaks or the car needs repaired sit your children down and talk to them about how you financially deal with the unexpected.