Guest blogger Kathryn wrote a great article on the blog “Million Dollar Journey”  that outlines 8 fundamental money lessons for children.

I consider her points about not saying “we can’t afford that”, letting children make mistakes and understanding compound interest to be very important and often understated:

http://www.milliondollarjourney.com/8-fundamental-money-lessons-for-kids.htm

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When children are growing up, they learn a lot of their financial habits from observing their parents behaviour. For this reason, it is important for parents to be aware of the messages that they are sending to their children concerning money.

The blog “My Wife Quit Her Job” has a fantastic series of articles describing misconceptions that your child has about money:

http://mywifequitherjob.com/2008/11/01/5-misconceptions-your-child-probably-has-about-your-finances/

This blog has other interesting articles about kids and money here:

http://mywifequitherjob.com/teaching-kids-about-money/

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We live in a consumer-centric society. Wherever we look, we see an endless supply of gizmos, trinkets and nick nacks that we are repetitively told that we cannot live without.

Furthermore, banks and financial institutions are only to happy to give out magical plastic cards that allow us to run out and buy these things on impulse, and worry about paying for them in the future. Indeed, it has been reported that the average American family has $8000 in credit card debt.

More and more people agonise over how to teach today’s children the good old-time habits of earning and regularly putting aside money for the future. A piggy bank can serve as a great teaching tool.

• First impressions matter - piggy banks have a cute and friendly appearance that appeals to children more than a sterile-looking money box.
• They teach goal setting -  a child may choose to work buying something expensive like a bicycle or games console that would require saving for a prolonged period.
• They teach self-discipline – instead of squandering an allowance on cheap indulgences like candy bars, they can put away all or a portion of the money knowing that they able to get something far more substantial in the future.
• They teach patience – as the piggy bank fills up, the child can feel it getting heavier and they can shake it around to hear the clanging of the coins.

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