How many times have you told your kids, "Money doesn't grow on trees"? Eventually, your children are going to have to learn that getting the things they want requires some effort. The sooner you instill this concept in your child's mind, the better. Lessons about finances are easy and can be incorporated into everyday life early on. These lessons can also be fun and if you make them a game, your child might not even be aware that you're teaching anything at all.



Parents are all too familiar with the typical trip to a store accompanied by small children dazzled at all the offerings at their fingertips (need we really explain further?). Shopping is the best place to start teaching children about money and financial responsibility.

The first concept to get across is "wants" versus "needs". Most kids will be attracted by brightly colored packaging or influenced by television programs they've seen marketing certain items or cartoon characters. Bright packaging and something familiar is followed by "Mommy, I want…!"

As you go through the store, explain the choices that you make. A grocery store is easiest for this lesson. Yes, you understand your child may "want" the Rocky Road ice cream and Neon Green Go-Getter popsicles, but you only have so much money and you "need" the broccoli, the milk and the eggs. Some things you buy to live and eat well. Other things you can live without.

While you're at the grocery store, teach your child how to compare labels for value. Sure, the name brand package looks fancy and has nice pictures, but the store brand is exactly the same product, sold at a lesser price and better value. Make finding bargains and better prices a game by having your child help you look for sales and help you cut coupons out at home.

Another important concept to teach children is that of quality and durability over cheap and disposable. Teach your child the advantages of buying a well-made toy or piece of furniture by letting them help pick out a desk or a bed for their room. Show them the difference between long-lasting quality and run-of-the-mill, assembly line production. The mass-produced plastic product might be cheaper, but will it last as long as the hand-made rocking horse?

Shopping is a great opportunity to teach your children about credit cards and "plastic cash" too. Children should learn at an early age that the piece of plastic you give in exchange for goods is not "free money". Explain that you're making a promise to the store that you will pay for the goods later or that they'll accept your debit card because you've saved money and "put it on" the card.

Credit cards are also good for lessons about action now, consequence later. Ask your children what they think might happen if you don't fulfill your promise to pay for the credit card bill when it arrives in the mail? The point is to help children understand that money doesn't just "happen" and that even though you can't always see it or touch it, it's there and you have to manage it carefully. Children will also learn that money doesn't appear out of thin air every time they want something.