5 Ways to Teach Your Kids About Money

Money provides people -- both kids and adults -- with opportunities to make good and poor decisions. Ideally, we will be making thoughtful decisions about our money-and continue to improve our decision-making skills as we grow older. Parents can be great financial coaches to their kids by educating, empowering and motivating them to become consistent savers and helping them to develop good money habits in their early years.

Saving enough money for retirement is the single biggest challenge for many of today's older adults. Just as reading at a very early age helps kids to develop their intellectual skills to do better in school, and learning foreign languages in the early years can be easier; financial education can-and needs to be-taught in the early years, as well.  Everyday spending decisions can have a far more negative impact on children's financial futures than any investment decisions they may ever make.

To help you be a good financial coach to your kids, here are 5 simple ways to help educate children about personal finance and managing money:

1. Teach your kids about money as they learn math basics. Simply count pennies, nickels and dimes and quarters with them.

2. When your child is in the first or second grade, create a save, spend and give container. You can decorate tin cans, boxes, brown bags-get creative and have some fun!

3. If your son or daughter wants something special and you aren't intending to give it to him or her, let the child earn the item—or, share the cost. This will enable the child to learn how to set goals, follow-through, and learn to become more responsible.

4. Go on a money "field trip." Take your kids to your local bank branch and open up a savings and checking account in their names-with you as a co-owner of the account. Help them save and spend intelligently. Review the account statements, and visit the bank periodically, so that they begin to feel comfortable with the banking process.

5. Use television as a teaching tool. Discuss how advertising and marketing impact buying decisions. Talk about the way ads entice people to make purchases they don't need.

So, if you haven't started the "money talks" at home, there is no better time to begin. Remember, little steps yield big results. While you're helping to teach your kids the value of a dollar, don't forget to have some fun along the way!