National Teach Children to Save Day

Today is the 10th annual National Teach Your Children to Save Day sponsored by the American Bankers Association. How can you teach your children responsible financial management? Here are some tips:

• Encourage your children to save for a major purchase - A summer's worth of mowing lawns and saving allowance money will make that Nintendo all the more valuable.
• Dole out allowances in small bills - Instead of giving your kids a $10 or $20 bill each week, give them their allowances in smaller denominations. One $5 bill and five $1 bill's is a much easier combination to break apart and save.
• Explain the financial world - It may seem odd to talk to your nine year old about how credit cards work, but these can be incredibly valuable lessons. Use bill payment and check-out experiences to pass on money management skills.
• Pay interest on your child's savings - Reward savings by offering to pay "interest" or incentives on the amount your kids save. For example, you could offer a $5 reward if a child saves $20 a month.
• Visit financial education centers - Many banks have special areas or education sites  designed for kids. Citigroup has multiple sites and Sovereign Bank hosts KidsBank.com. Many children's museums also have banking exhibits.
• Hold off on giving them credit cards - My own rule is that until you have a job and a steady income, you can't afford credit. The temptation to overspend and go into debt is just too great for most teens and college students.
• Buy a Moonjar or make your own - A Moonjar is a modern piggybank for kids with three compartments, one for spending, one for saving and one for sharing.

Share your tips for teaching kids about money! What did your parents teach you? What do you wish you had been taught? What are you teaching your kids? Post your feedback in the comments section below.