If you're a Baby Boomer, your parents probably weren't like this. They were too busy trying to feed, clothe, and provide shelter for their families; everything else was gravy. But in today's world of borrowing, credit and instant gratification, seemingly anything we want, we can have. We pay for it for years, and thanks to interest rates, we end up paying a lot more than actual sticker price. But hey, we have it now, right? Thing is, if we step back and think about it, we can learn a lot about finances from our parents. We can also pass that info on to our kids, creating a lineage equipped with sound, smart financial knowledge.



Teach them about today's money

Spending isn't like it used to be. Through the prevalence of checks, credit cards and debit cards, cash is a rarity in today's world. But it's important that our kids understand where money comes from and how it's used. When you plop down the plastic for a purchase, let your kids know that the money is either coming directly from your bank account, or a bill will arrive in the mail which you will soon have to pay. When at the ATM, tell them that cash isn't magically coming out of the box. It was put there from your work, and its money you earned. As they grow older, instill more sophisticated lessons into their lives. Tell them about late fees, interest and the importance of saving. The early you start teaching your kids about finances, the better off they'll be.

College quality counts

Studies show that four-year undergraduate degrees are now the norm in the working world, and in order to stand out, a graduate degree is necessary. On average, the income of someone with a master's degree was nearly $10,000 greater than that of a person with a bachelor's degree. Also, the higher rated the college your child attends, the more they will make. Start saving now for your child's education, and be prepared to shell out extra over the long run if need be. It's proven that the amount they will make after college will easily outpace the extra cost incurred by attending a big-name school.

Save, Save, Save

Don't spend, spend, spend. Advertising today would have you believe that everything on the market is an absolute must have for you and your family. Credit card companies are approving younger and younger kids every day. Resist the urge to splurge. Make saving a priority in your family, and introduce kids to the concept as early as you can. If your child requests a big ticket item, put them on an allowance and encourage them to save for it. Tell them that if they save an agreed-upon amount within a certain time frame, you'll match it (a nice little introduction to the world of the 401(k)).

Help them as adults

Studies show that most grown, independent children ages 25 to 34 receive over $14,000 from their parents. No, these aren't slacker kids still living at home. These are independent, educated adults who earn a decent income, but who might need a little help getting started in the world. Giving now can help your kids save on estate tax when you're gone, and will also have more of an immediate impact for them and more satisfaction for you. The IRS will allow a gift of up to $11,000 per year for each child without incurring a gift tax, and couples are allowed $22,000. When you do give a sizeable gift to an adult child, make sure you set the ground rules on it before the money exchanges hands. Let them know that the money is to be specifically used for something like a down payment on a home, not for a new sports car. You want your cash gift to help your child become independent, not condition them to expect parental gifts for frivolous purchases.

Most importantly, be a role model to your children when it comes to finances. Just like everything else, you can preach until you're blue in the face, but if they notice you making unsound financial decisions, the more likely they are to do the same.