This is a topic that has always intrigued me – how do I teach my kids the right lessons about Money Management? When do they start handling money independently? Let’s discuss a bit about the top few questions about Kids and Money in this post.

1. What’s the most important tool for teaching kids about Money Management? The answer is simple – It’s education. The best tool you can provide your kids is the knowledge that they’re getting things from life very easily – which their old man/woman did not. I admit that all of us want our kids to have the best in life and do not want to deny them the comforts of life, however, we need to stop going overboard.

As an example, a friend’s daughter who’s now going to the Third Grade in her school wanted a Nintendo DS. The reason was that everyone else in her class had one – and when the weather was bad outside, the teacher encouraged all the students to play with video games instead.

Now, in the above scenario, my suggestion would be to talk to the teacher and ask her to tell the students to read books from the library or work out in the school gym instead. How is playing video games everyday going to improve their lives? You might have your own view, but I believe that the idea of a teacher asking kids to buy video games is wrong.

2. When should kids start to have money of their own? I’d say – Right after they are born. I mean – it’s important for you to provide financial security to your kids, right? So as soon as you can, invest for them, their financial security and their education.

For example, when my friend had a son, as soon as the baby came home, my friend updated his pension, life insurance and retirement related accounts to reflect the baby as a beneficiary. Another friend buys a Savings Bond as a gift each year, on her kids birthday.

3. No seriously, I mean when can I provide my kids money to spend aka allowances? As soon as they can count is my opinion. One of the first things you will need to buy them is a Piggy Bank. All of their spare change must go in there. The larger monetary gifts (such as cash from Grandpa on the birthday) should go into their Savings Account that you control.

The earlier you start the better. We recently bought our daughter a doll that she really liked. She played with it for all of two weeks and the next time we were in the store, she wanted another toy. Fortunately, both my spouse and I were in sync and we instantly replied with a firm “No”. We did take the time out to explain to her that she wasn’t going to get everything she wanted – because there was a financial constraint on how many things she could buy in a month.

4. What’s the best way to teach kids to save and budget? This one’s easy. The best way to teach your kids to save and budget is By Example.

Think about it. Where are your kids learning their fundamental values in life from? Who teaches the kids what’s right and wrong? Who teaches the kids to be frugal. You do. So why should you not be teaching them to save and budget as well?

The best way to teach the kids to budget is by limiting their spending. Each month, every kid gets a certain “salary”. Out of the salary come their clothes, books, toys and so on. The salary must be carefully structured so that they have all their essentials, but need to save to pay for luxuries (such as a new Nintendo DS game, for example). As soon as the kid is old enough, he/she must be involved in their spending and encouraged to save.

One excellent trick to get the kids to save is to provide a “match” for their savings. A friend has an arrangement with his 10 year old so that at the end of the month, he pays her a dollar for every dollar that she saves from her allowance – up to a 100 dollars.

5. At what point should my kids be part of the family budget and goals? From their teens. Hopefully, if you have followed the practice of encouraging your kids to save and budget, by the time they reach their teens, they are responsible with money. This would be a good time to have them sit down and have their say in family finance matters.

For example, should we redo our deck first or buy that big screen TV for the family room right now? Decisions such as these would do with input from all the responsible members of the family.

Do you have more ideas, questions or thoughts? Please post them in the comments.

Kids!! What would I not give to be carefree and have boundless energy?

If you’ve caught yourself saying this many times, welcome to the group. Kids are the ones that keep you lively. Just when you think you’ve got them figured out, they do something you’d never thought of (like growing up!)

If you have a kid like mine, you need to find ways to keep your kid/kids occupied, without breaking the bank (or your monthly budget). Here are my top five ideas for keeping your kids occupied and happy, spending high quality time with them, but spending very little money:

1. Visit the local library with kiddo: This is my personal favorite. Going to the library is an outing, it’s a great way for parents and kids to cozy up with a book and best of all – it’s free. If your kid is old enough to read, pick up a book for yourself as well as for them and sit down for a good old reading session. If your kid is not old enough to read yet, read to them from a book. This is a great way to emphasize to them the importance of reading as well as give them a great starting point to being a well-rounded personality.

2. Friends, Relatives & Grandparents: If you are well-acquainted with neighbors or friends that have children of similar age as your child, invite them over for a play session, or take your kids to their place for an outing of fun. Keep the session to about two hours or lesser and emphasize that your kids must be on their best behavior at all times. This is also a great way to teach kids to socialize outside school. If you have parents that live nearby, that’s even better because Grandma and Grandpa love to see their grandchildren (don’t forget to call first, though!!) and their children (face it, how long has it been since you spent time with your parents too?)

3. Chuck-E-Cheese’s: A perfect place to visit post dinner especially on Friday and Saturday nights. Place emphasis on the “post dinner” part though. I frequently use those “buy 25 tokens, get 25 free” coupons and my daughter loves it. The occasional coupon makes Chuck-E a great treat for her. We carry a bottle of water and don’t eat or drink anything in the store but have loads of fun all the same.

4. The Local Grocery Store: I’m serious. If you look closely, you will find that grocery stores are engaged in a competition these days. They are trying out various things to attract and retain customers. Some stores offer 5 cents off on gas when you spend $50 with them, others offer reward points and so on. Our local grocery chain is engaged in a fierce customer-loyalty battle with Walmart. They offer this great free wi-fi cafe and a little kids play area in their leading store. The idea is that you drop your kid off to play, they watch over him/her while you take the grocery cart and shop – and spend a lot of time which equals a lot of money too. What I do is to drop my daughter off, finish off my shopping real quick, grab a cuppa in the cafe and then sit down with a laptop. While I’m having fun blogging, my daughter’s having fun in the play area. While this option is great, I’m not a great fan since I’m not really spending a lot of time with my daughter this way. We do this about once a month, though.

5. The Mall: I know what you’re thinking, how on earth could this be a low-cost option? It’s easy – just visit the mall right after lunch. All you need to do is to take kiddo to the kids-play area in the mall. Grab a coffee along the way and let your child stretch their legs a bit. My daughter loves this very much. Whenever my wife wants to visit the mall, this is what my daughter and I do. We visit the mall right after lunch, I baby-sit my daughter in the mall’s play area for kids and my wife shops. My daughter has met a lot of kids there and it’s nice when she plays make-believe games with them.

Do you have other ideas that allow you to have fun with your kids while spending zero or very little money? Please share them by commenting on this article – I would love to hear back from readers.