Raising Money - $mart Kids

It's never too early to begin teaching your kids about the value of money. But where do you begin - especially if your own money-saving habits haven't been the best. Following are some tips to help you get your children started.

1) Provide an allowance. Age six or seven is a common starting point. Before receiving an allowance, kids should: be able to count, add and subtract, be familiar with the different coins and bills, show an interest in money or spending.

2) Set an example. Show your child how you've created your household budget and involve your child in shopping. Create a shopping list together - then stick to it.

3) Teach children to comparison shop. Go online to research prices at different stores. Instruct kids to keep receipts so defective items may be returned.

4) Limit TV time. The constant messages buy, buy, buy everything from fast food to toys can take a toll on a parent - and a child's - wallet.

5) Take a trip to your local bank or credit union. Even five-year-olds can benefit by opening their own saving account.

6) Make teens responsible. By buying some of their own clothes and other necessities, teens may better appreciate how much things cost.

7) Set short-term goals. Five- or six-year-olds might save for a five-dollar toy that they can get in just two or three weeks, while 10-year-olds might save for a larger-cost item over several months. When kids feel the power of delayed gratification, it teaches them that they can set meaningful goals.

Use the 10 - 30 - 30 - 30 "Percent System"

Many financial professionals recommend using the "10 percent - 30 percent - 30 percent - 30 percent" system to help your child split up any money he or she earns or receives. Show your child how to divide the money and put it in four separate jars. Here's how it works:

1) 10 percent Charity - Take 10 percent off the top to share.

2) 30 percent Quick cash - Use this 30 percent for instant gratification.

3) 30 percent Medium-term Savings - Save this 30 percent for 1-6 months to purchase something special.

4) 30 percent Long-term Savings - Use this 30 percent for important things in the future, such as a college fund.

Giving Back While some families tithe or require their kids to set aside part of their allowance for charitable giving, other activities can also make an impact on children. Here are some suggestions to help teach kids the value of giving back.

1) Designate a container in which your children can deposit their loose change. When the jar is full, they can donate the money to a charity.

2) Ask your kids to help choose a gift for a holiday toy drive.

3) Have your kids round up clothes they've outgrown or toys they no longer play with. Take them with you when you donate the items to the Goodwill or Salvation Army.

4) Remember that charity involves gifts of time as well as money. Encourage your children to offer their services (without pay) to help the elderly or water plants and feed pets for vacationing neighbors.