Educating, motivating and empowering children to be everyday savers and investors will allow them to save more money and get more for the same amount of money spent. Everyday spending decisions will have a more negative impact on your child than any other investment decision. Here are fifteen simple ways to help you teach your children about personal money and how to manage it: 1. Tell your children what money is as soon as they can count it. Actively tell them about money. Observation and repetition are two of the most important ways children learn. 2. Talk to your children as they grow up about your views on money – how to save it, how to earn it, and most importantly, how to spend it wisely. 3. Help your children recognize the difference between needs, wants, and desires. This will prepare them for good spending decisions in the future. Setting goals is fundamental to learning the value of money and saving money. Young and old, people rarely reach goals they haven’t set. Almost every toy or other thing can be a goal-setting training session. Such training will allow children to learn to be responsible for themselves. 5. Show children the value of saving and spending money. Explain the concept of earning interest on earnings from savings. Consider paying interest to children on their savings at home; children can help calculate the interest and also see how money accumulates quickly through compound interest. Later, they will realize that the fastest way to get a good credit rating is through a series of successful daily savings. Some parents even match their children’s savings to their credit rating themselves. 6. When giving kids pocket money, give it in a way that will encourage saving. If giving$5, give them five dollar bills and ask for at least one dollar to be saved. (Saving$5 every week at 6% compound interest will give you$266 after one year,$1,503 after five years, and$3,527 after 10 years!) 7. Take your children to a credit union or bank and open their own savings account. Starting their savings routine early is one of the keys to successful savings. Remember, when they want to withdraw money to buy something, don’t turn them down – it may cause them to simply give up saving. You can also tell your child about the U.S. Savings Treasury. Treasuries are still a good value, costing only half their face value, and if used for college education then in some cases the interest earned is tax-free. Perhaps more importantly, when given as a gift to a child, the bond will not be spent immediately, reinforcing the concept of saving and goal setting. 8. Keeping good records of the money saved, invested and spent is another important skill that young people should master. A simple way to do this is to prepare 12 envelopes, each containing each month’s money, and use a larger envelope to contain all the envelopes for the year. Set up one of these systems for each child. Encourage children to put all the small shopping tickets in the envelopes and record what they did with that money. 9. Use everyday shopping experiences as an opportunity to tell your child the value of money. A trip to the grocery store is a child’s first experience with spending money. About one-third of after-tax wages are spent on groceries and household items. Spending smarter at the grocery store (using coupons, mall specials, comparing prices on items) can leave a family with$1,800 a year. To get your kids to understand this, show them how to plan economic meals, avoid waste, and use leftovers effectively. When you take your children to other types of stores, explain how to plan ahead for what they buy and how to do unit price comparisons. Show them how to check prices, quantities, repairability, warranties and other things customers have to consider. Good planning can make spending money fun and efficient. Spending money without a plan often results in 20 to 30 percent of the money being wasted because we don’t get the most value from what we buy. 10. Allow young people to make their own choices about how to spend their money. For better or worse, they will learn from it. You can open a discussion about the pros and cons of this expense before the money is spent. Encourage them to use common sense when spending. This means doing research before buying a large item, waiting for the right time to buy, and using the “choose first, spend later” technique. This technique includes choosing at least three other things that can be purchased with the money saved up for one thing, and then making a choice among these items to buy. 11. Show children how to value advertisements for goods on television, radio, and in print. Will an item really have those features presented in the ad? Is the price real when it is on special? Is there a similar product that can be made better, perhaps for less money, or at a greater value? Remind them that if something sounds too good to be true, then that is largely true. 12. Alert your kids to the dangers of borrowing money and paying back interest. If you change the interest rate on a small amount of money you lend them, they will quickly learn how expensive it is to borrow someone else’s money for a particular time period. For example, to buy a$499 TV and pay back$31.85 per month for eighteen months at 18.8% interest, it actually costs the buyer$575. When using credit cards at restaurants, take the opportunity to teach your children what credit cards are all about. Explain how to verify payments, how to calculate tips, and how to protect against credit card scammers. 14. Make sure your kids are vigilant when using credit cards, even after they get to college. Credit cards represent this one message: “Spend money!” Some students report using credit cards as cash advances and for everyday needs, rather than for emergencies (the original original intent). Many of these students need to skip class to do spare time work to pay back the money they spent on credit cards for purchases. 15. Establish a regular family discussion about finances. This is especially important for young children – a time when children can settle their savings and receive interest. Other topics for discussion should include the differences between cash, checking, and credit cards; smart spending habits; how to avoid using credit cards; and the benefits of saving and investing for growth. It is also helpful to discuss with your children news about the international and local economy, how to economize at home, and other ways to save money. All of this information will play an important role in holding them accountable for managing their finances well.