If you haven't seen any part of Lauren Greenfield's documentary interviewing Los Angeles teens about money, let's just summarize the situation with the phrase 'out of control.
' Teens that don't have the funds to buy the latest fashions or expensive cars feel somehow inferior.
Teens with big limits on parents' credit cards feel the world should be waiting on them.
It's an odd scenario.
It is easy to teach the basics about money to children when they are young, but much harder to change habits of a college aged teen thousands of dollars in debt.
Start early with good habits, making money a friend rather than foe.
Around age 2-3, start talking with them about spending and saving.
Let them ask questions and engage in fun answers.
If you don't have those at hand, perhaps heading off to one of the many websites focused on raising financially literate children can help, like DoughMain.
com, Sesame St.
's 'For Me, For You, For Later' fun financial learning tools, and the many sites that integrate money management with fun, online games.
Also, get a piggy bank.
When the tooth fairy comes, or when kids get money for special events such as birthdays, holidays or achievement, put it in the pig.
As kids get a little older, 5 and 6 year olds are ready for the four bank system.
There are even piggy banks with four holes in the designed to teach around the concept of spend, save, invest, and give.
If taught the concept of not spending the entire windfall at once, but rather putting aside some in each category, it is more likely that those good habits will continue when they begin to earn some real money.
Also, pay for things in cash.
Go to the store with a couple hundred dollars.
Let them hold the money, then count it out with them at the register, and have them hand it to the clerk.
It makes a bigger impression than signing a credit card receipt.
Between ages 7 to 13, kids benefit from having an allowance.
It teaches responsibility and makes them more of a part of the process.
They should know what they are responsible to pay out of that allowance.
As they get older, the allowance can get bigger along with their responsibilities.
Additionally, give kids a budget for the things that come out of the family bank account.
Many believe that everyday chores like clearing the table and cleaning their room should not be rewarded, as that is just part of being a family member, helping one another with daily tasks that everyone benefits from.
Jobs that take a little more time and effort, such as waxing a car, cleaning a basement, or weeding a garden, should be rewarded with some agreed upon amount.
As their needs grow, children will ask for more.
That is the perfect opportunity to begin teaching negotiation skills.
Talk about when their last 'raise' was granted, why they deserve more, and what their plans are for the extra money.
Between ages 14-18, it is a good idea to being introducing children to checking accounts, and credit cards, with secured cards that have low limits.
Make them responsible for paying the bills.
If they overspend, many say it is best not to bail them out, but let experience teach them at this low level as opposed to learning the hard way by maxing out one credit card, applying for another, and soon becoming overwhelmed with debt.
Maintaining the four bank system will help pave the way for responsible, financially fit adults as they move from college into careers.
While nothing takes the place of experience, leading with a good example goes a long way toward raising smart money kids.
It often happens that, through teaching their children, adults become more responsible spenders, savers, investors and givers, as well.