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Recent statistics reveal that America's young people are not financially prepared for life in the real world.
           The average credit card debt among college students who carry debt is $7,800.
           18-24 year olds represent the fastest growing age group filing for bankruptcy.  

Another group of statistics tells us why this is happening:
          80% of parents believe their children are being taught personal finances at school.
          90% of high school students say that whatever they learned about money they learned from their parents.

We've been relying on the schools to teach our kids about personal finances, but they aren't doing it!
The fact is, as a parent, you are responsible to teach your kids about money and it starts at home.

My parents never taught me in finances and so is it any surprise that I wound up $90,000 "upside down" back in 1998?  After studying extensively about money, banking, economics, personal fiance, business, and investing and by putting what I learned to use, I was able to become debt-free by 2003. The first thing I wanted to do was teach my kids who to be smart with money so they wouldn't have to repeat my dumb mistakes.

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It is my experience that the younger your kids, the easierit will be for them to listen and accept what you are teaching.
The key is to capture this opportunity before peer pressure starts to compete with you!  

Research has shown that you can start to teach your kids about money as young as four years old and should most definitely be started by age 12. Teenagers are a much harder group to teach as their friends become more influential and their quest for independence from you begins.  

Research also shows that by age 13, most kids have already developed poor money (saving/spending) habits that they must now break and replace with new successful habits, if they are to be financially successful.

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I've found that the best way to learn to do anything successfully is through hands-on experience.
For your kids to learn about money, they need to manage "real" money.

Traditional $2 - $5 per week allowances, merely teach kids to spend.  
To learn to manage money, kids need to be paid a "Real" salary: a "Kid's Pay" each and every month and the amount should be in direct proportion to your income and lifestyle for it to have real meaning to them!  

Would you ever consider paying your kids $50, $100 or even $200 every month as their Kid's Pay?  
Chances are you do anyway. It's just a matter of how and who controls the decision making.  
Just think of how much you spend on your kids every month for toys, games, movies, books, candy, video games, CD's, DVD's , MP3's, gifts; the list goes on and on!  

Now ask yourself, of all the money you have spent so far on your kids, what did they learn about money other than ask Mom or Dad?  Since you are paying for everything anyway, would you not agree it would be useful to pay them part of what you currently spend and have them manage their own money?

The key is to pay them their Kid's Pay relative to the family income and lifestyle, then have them actively participate financially in every day life using their money.

Listen to what Christine & Jonathan Hopegood have to say about how paying their kids REAL money has made them more responsible and deliberate: "We started using the KidsWealth Program three months ago with our 10 and 11-year-old.  The change in attitude has been phenomenal; they have gone from "I want" to thoughtful planning and responsible purchasing!

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As a parent, you know that kids develop lasting habits from repetition.
We've all heard that old saying "practice makes perfect."  

Actually, practice makes permanent.  
If what you are practicing is wrong or doesn't work, then what result would you expect to get?
The key is to teach them a simple money management system that works and delivers results - one that is based on a proven wealth-building formula that will help your kids not just learn to manage money, but will also help them to achieve financial success.  

(advertisement ahead; but, with interesting concepts)
The money management system behind the award-winning KidsWealth Money Kit is a wallet system that allows kids to separate their money into 5 "accounts" as follows:

          + 30% of their Kid's Pay goes in their WEALTH Account - this is their Investment account. Money is this account is never to be spent, only invested in various ways to grow their wealth
          + 20% goes in their PLAN Account - this is for your kids to be able to plan for and purchase more expensive items like a bike, game cube, Xbox or computer

          + 20% goes in their LEARN Account - your kids use this money to buy books, education toys and games, trips to museums, parks, zoos, travel or anything that is educational in nature

          + 20% goes in their FUN Account - this is your kids spending budget for the month for toys, games, movies,popcorn, snacks, or treats that they buy on their own with their own Fun money
          + 10% goes into their ANGEL Account- this is their charity account, money to be used every month to donate to charity, tithing at church or helping others in their community.

(advertisement portion ahead)   The KidsWealth Money Kit comes with 5 wallets that are color coded so that even kids who are too young to read can use them. Since they are made from durable vinyl they will probably last until your kids are in college. See what else comes in the KidsWealth Money Kit at http://www.KidsWealthMoneyKit.com

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Once your kids have been paid and are managing their money using the wealth-building money management system, you need to let them make their own decisions with their money.  Offer advice, but they must make the final decision and be accountable for their decisions. This is how your kids will learn and it's ok if they make mistakes. Better they make these mistakes within the safety of the family environment and not under the influence of a credit card company.

Kids will surprise you with how great they are with money once they understand its true value and how it relates to their lives.

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Do you fear giving your kids money? Many parents do! This is valid if only money is randomly given. If there is a structured process for paying your kids, a system for them to manage their money and be responsible with their money, then you will find this fear unnecessary.  Also, for your kids to learn, you have to teach them and believe in them. This helps them grow and become strong, confident and develop high self-esteem. Guide them as you see best, support them through the process and reward them for success.

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The best way to motivate your kids is to keep it simple and make it fun. You do not need to start by teaching them a lot of confusing financial terms and concepts; this will come in time after they have dealt with their own money for a while. Financial literacy - words and jargon have no meaning without money and knowing how to manage it. The key is to teach financial competency using real money in a simple fun and meaningful way.  Imagine trying to teach your child to ride a bike by giving them a book without giving them a bike to ride. Not only will they find it boring, they cannot learn to ride a bike. For them to learn, they need to get on, start peddling, and eventually they 'get it' on their own once they figure out how to balance, stop and handle. The same goes with teaching your kids how to handle money.