Kidpreneurs: 10 Tips for Managing Kids and Money

     The bright, sugary cereal box is just at eye level. The bold blue, red, orange, pink and yellow jump out and grab the eyes. The free DVD inside puts the situation over the top and immediately the box is off the shelf and in the hands of your child. And then the most feared words in history are spoken: "Mom, can I have this?"

   We live in a "Want, Therefore-I-Get" society. Our children completely understand that concept. Just zip the plastic card through any machine and you get what you want! From a bag of fries at McDonald's to an iPod at Macy's, anything is possible with THE CARD.

   But, what are we really teaching our kids? We know that actions speak louder than words. We are teaching them to buy with credit, that everything comes easily, and that you can have anything you want.

   We must assume that those thoughts are a direct reflection of our economy today. In the last 15 years, credit card debt has risen from $3,000 per household to almost $10,000 per household. According to Business Week, there are 64.6 people per credit card in India, but five credit cards per person in the United States! Home equity is at its lowest point since 1950 (below 50 percent), and, for the first time since the great depression, the savings rate is in the negative. So, the next time your kids say "I want," try these 10 tips to teach them about money. 

1. Just say no! If you have young children, just say no! They don't have to have everything they see! We live in a society of instant gratification. Teach children how to wait and earn what they want.

2. Teach them to procrastinate on purchases. Half the things we want are impulse desires. Make your children wait a week and see if they still "have to have it." This will teach them to think rationally about purchases and consider each decision thoroughly.

3. Create jobs for your children at an early age. Make them earn an allowance. This is a good habit to start and can last a lifetime.

4. Create a budget. You can't get ahead in the money game if you don't know where the money is going. Save first, give to others second, spend third. Allowing your children in on this process will help them appreciate where money goes and what it takes to run a household.

5. Make them question their spending. Do you really need that purse? Or those concert tickets? Or that new videogame? Have them weigh the pros and cons of the purchase versus the money that could be saved and used towards something in the long run.