One of our main roles as parents is that of an educator. While there are many things that we allow our children to learn about at school, we know that money management is not a priority at most schools around the country.

With that in mind, it is important that we play an active role in helping our children develop the skills that they will need to be financially sound adults. This is not a skill that can be learned overnight, so it is imperative that we start to apply these principles to their lives early. Consistent practice will lead to developing good habits.

Proper divisions

Our children should know how to divide any money they receive into three categories: tithes, savings, and spending. If we show our children how to tithe off of their $1 bills, it will be completely natural for them when they start earning $1,000 paychecks.

We should impress upon our children that God is the source of all of our increase. It is only right to return to Him His tenth. We can also use the opportunity to teach them about helping those who are less fortunate than them. This can include donating money to a particular cause or giving away toys and clothing that they no longer use or need.

Our children should also put aside a portion of their earnings for savings. They can create both short term and long term goals that they would like to accomplish, such as saving for a special toy that they'd like to buy or saving for their own college education. Learning to save well in advance may keep our children from getting into pitfalls like debt.

Allow them to earn

We cannot fall into the trap of giving our children everything that they ask for. I have personally seen the disasters that result. These children are much more likely to grow up to be irresponsible adults who expect everything to be handed to them. They may place a high value on materialistic things and look to these items to create a sense of self-worth.

Rather than giving our children everything they ask for, we should develop some type of allowance system that teaches them the value of money and helps them learn that they must earn the things they want.

Many children have a misconception about money. The ATM machine will not dispense money to us if there is none in the account. They don't fully appreciate that we go to work every day to earn the money that buys the things they ask for.

For example, children may not fully understand the difference between a $20 CD and a $200 video game system. A gift is a gift to a child; the price is often irrelevant. As parents, we have to help them distinguish between the two.

If, for example, the child's allowance is $20 a week, they will quickly learn how to budget their money. They will see that while it takes one week to get a CD, it may take 10 weeks to get a new video game system. Our children will have a greater appreciation for the things we give them, and they will be more selective in the things they ask for.

The sooner we start teaching these very important skills, the better off our children will be when they have to face real world financial issues without us.

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