Budgets.  Spending.  The economy.  Money.  The talk everywhere, it seems, is about money.  It’s been the major topic of our national conversations and debates for two years now.

So, what are you doing to teach your kids about the value of a dollar?  Specifically, what are you doing to teach your kids about saving money?  Our country’s personal savings rate is beginning to improve somewhat (it was near zero not too long ago) but we’re still nowhere near where we need to be.  You’ve taught the basics to your youngest kids, like how to identify money – pennies, nickels, dimes, quarters, the various denominations of paper money – and how to make change.  But kids, being kids, want to indulge in kid-like behavior.  Spend, spend, spend.  Now that they’re getting older, it’s time to teach them the more mature lesson of saving money.

Here are a few tips.

1. Show why saving is important.  Show kids what you’ve been able to do with saved money.  (Or, what you weren’t able to do without it.)  Talk about the new car, the big-screen TV, the clothes, the vacation, or the semester in college that was possible because of your diligent saving.  (If you charged or borrowed and paid interest on any of those things, you’re not allowed to use them as examples.)


2. Open a savings account.  Let your child have her own savings account, just as she has her own library card.  Allow her to see the amount rise as she contributes.  You can add further incentive by giving her some extra motivation.  Add to her account $1.00 for every $5.00 she socks away, or if you’re feeling very generous, match her savings for a specified period of time.


3. Set goals .  It’s much easier when we know what we’re aiming for, so work with your child – talk with him, ask questions – to set saving and spending goals.  Make lists, prioritize.


4. Teach about “needs” and “wants.”  There’s a big difference.  Help children recognize that just because we want something doesn’t make it a necessity.  There actually exist some families who don’t have the newest video games!  Imagine!


5. Be a role model.  Show how you have a savings account, how you shop wisely, how you’ve put off your own “wants” until you can afford them comfortably, one at a time.  Postponement of pleasure is a grown-up characteristic, learned from grown-ups.


6. Give a reasonable allowance.  An earned allowance is an ideal way to teach children about spending, saving, and other money lessons.  As they get older, the lessons can be more sophisticated, like investments, the dangers of credit card debt, and taxes.


7. Show your values.  Talk about your work, how your salary is based on the work you do.  Show how your earnings reflect the health of your business and the economy.  If your family is enduring a difficult time, find a way to talk about it in an age-appropriate manner.


8. Show how to budget.  You have a budget and set spending priorities, so should your child.  Show how you set up a budget and stick to it.  If you’ve had troubles in the past, tell how it made you feel and the difficulties it caused.


9. Don’t forget charity.  Teach your kids the significant personal fulfillment of contributing to a charity your family supports.  Even a little bit.  This shows your family’s values in a real and tangible way.  Let her have some say in the decision.  If she’s an animal lover, for example, a nearby shelter will welcome the assistance.


10. Don’t forget fun.  One of the principal pleasures of having some spending money is to spend it on things, experiences, and events that make us happy.  Allow your child to spend some of her allowance on fun, even if you think it’s frivolous.  It’s her money, after all.  This is another benefit of saving – a degree of independence.

Dr. Rick Blog readers, what are your ideas?  Click on “Comments” below to give us your opinions, stories, and questions.