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Raising a Financially Literate Child

You try to raise your children right and teach them values, and while morals and ethics are important, it's important to be sure children learn about money and finances. Raising financially literate children isn’t so different from raising kids who can tie their shoes, ride a bike or swim. Each requires commitment, patience, motivational skills and hands-on instruction. Here are some tips for parents to help their children learn about managing money.

Get them interested at an early age
When your children are very young, show them how to tell different coins apart. Then give them a piggy bank to store up their change. Piggy banks are a tangible place to keep their money safe, and they can see, hear and feel how the bank fills up.

Make saving a habit
Make a house rule of saving a percentage of income, whether it's birthday money from relatives, earnings from a lemonade stand, weekly allowance or a part-time job.

Become a charitable family
Donating money to help a local charity will help kids begin to understand that there are other uses for money besides just buying things for yourself.

Practice bargain shopping
Make a list then flip through the circulars in the Sunday paper to look for coupons and shop for the lowest price on items on your list.

Encourage goal setting
Have your kids write down their wish list, along with a deadline -- a skateboard by the end of the summer, a bike by next year. Visualizing may give kids the added motivation they need to save.

Give regular allowances
Allowances give children experience with real-life money matters, letting them practice how to save regularly and plan their spending.

Help plan a budget
Have kids write down what they'll buy during the week and how much each item costs. Then write down their weekly income. If it doesn't add up, they'll have to prioritize their "needs" and their "wants."

Encourage a work ethic
To earn money beyond their weekly allowance, suggest that kids find creative ways to make money -- doing special household chores or seeking jobs in the neighborhood such as raking leaves, mowing lawns, pet sitting or shoveling snow.

For more money saving tips, tools and other resources visit,
Feed the Pig, a national campaign created by the Advertising Council and the American Institute of Certified Public Accountants and, The Mint a Web site developed by the National Council on Economic Education in order to provide young adults with vital financial principles.

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