Teach your children about money is that the best time to learn is while they are young. It sounds so simple. Yet, it is one of the most compelling reasons to start as young as 2. I am not suggesting starting an allowance at 2. If you have attended or called in to my seminar you already know that. (How an allowance can make your child dumb and lazy!)

When children have the opportunity to work their financial muscle, so to speak, by the time they are 18 they have more confidence around money. To "work" those muscles, children need to have the opportunity to make mistakes. Making mistakes or failing gets such a bad rap that many parents try to shield their children from failure. However, failing is not bad. Failure provides the opportunity to learn. I am saying to let your child make the mistakes and fail with money. Let me give you an example.

There is a girl named Riley. Riley receives a weekly allowance of $5. Her parents hold on to the money. Riley is saving for an iPod. The iPod will cost about $150. She has $120 saved. One day she wants to go to the store with her friends and buy some candy. Her mom says no, reminds her about almost having enough for the iPod, and candy is not good food anyway. If you are a parent, I am sure you can imagine where the conversation went from there. Riley doesn't get the candy and is able to get the iPod in the next month or so.

But what has Riley learned? Probably, mom controls the money. I can't get what I want. An alternative let your child manage their own money. It's true that it may take a lot longer to get the iPod. But, when they come to you to ask for an ipod you can respond, "Oh Riley I know you want that iPod. How is your savings coming?" By doing so, you shift the responsibility back to your child. What do they learn? I have heard kids say, "Wow, why did I buy all that stupid stuff? It will take longer to get the ipod"
In both situations the mistake is buying the candy or "stuff". The difference is that in the second scenario the child learns to take the responsibility (manage their money) or live with the consequence (not having the iPod). Let children make these mistakes a lot. They will learn and adjust on their own. Learning this at 11 is a lot easier than learning at 30.

 I teach my children about money. In addition, I teach a seminar on kids and money teaching techniques for children as young as 2. Recently, my son asked for a Little Einstein rocket. The way I approached this is different. No current books on the topic recommend anything close to what we did. If you are curious you can read My 5 year old son wanted a rocket.

If you have questions about kids and money, allowance, finance, please feel free to email to me. Your question may appear in an article here.