One of the greatest values you can instill in your children is teaching them the importance of saving for a rainy day. With the collapse of the housing market and the incredibly high rate of unemployment, many adults, both young and old, found that they hadn't tucked away enough money to fall back on when times got tough. Of course, no parent wants to see their child endure financial hardships, especially when they're in no position to bail him or her out. What you can do is help your child plan for the future by teaching your kids to save. Assisting your children in becoming financially savvy is the gift that will keep on giving. The first step is to teach your kids the value of money. See a penny... pick it up. The bottom line is that every cent counts. The next step is to set up a chore chart. Break it down so that each duty receives a certain pay - just like a real job.
At the end of the week, compensate your child based on his or her performance. Provide your child with a piggy bank or even a jar where he or she can keep his or her allowance. Encourage your child to save some or all of the earnings. Try not to let them spend it all in one place. When the kids have $20 or more saved, take them to the bank so that they can open up a savings account. Many banks have kids' accounts just for this purpose. If you lend your children money for something, put them on a repayment schedule. This will teach them the concept of credit at an early age. Finance expert Janet Bodnar of Kiplinger's Personal Finance recommends these steps: Start early. Start small. Keep it simple. Make it fun. Set a goal. And reward your children's efforts. Of course, there's no greater reward for your child than learning the importance of financial planning. Your child will thank you later!