It has always been a good idea for parents to teach children the 
value of money and how best to spend it. Now, it appears, that 
this type of financial mentoring by parents is more than a good 
idea – it is a necessity! 

Consider the following which came from a variety of sources;

 * 79% of high school students have never taken a course on 
   personal finance. 

 * More than half failed a basic quiz evaluating their knowledge 
   of financial management. 

 * 94% say their parents are their primary teachers on financial 
   matters.

With those alarming statistics in mind, parents, grandparents 
and other caregivers need to begin teaching children about the 
importance of saving and investing, as well as how money can be 
used to make a difference in this world through charitable 
giving. 

Children appreciate such guidance and will be in a much better 
position to control their financial destiny if they learn to make 
it a habit for every dollar they earn or receive as a gift to:

GIVE - 10% to a charity of their choice

INVEST – 10% to build their fortunes

SAVE – 10% for the future, and

SPEND – 70% for everyday expenses. 

This basic concept can be taught to your children very early in 
life by getting them separate piggy banks for each purpose. With 
whatever they are given or earn, distribute it into different 
banks as the 10/10/10/70 ratio indicates.

The Mommie (Money Mama the Smarter Piggy Bank) Piggy Bank has 
been created by Lori Mackey (the kids and money expert)  just for 
this purpose. The piggy bank is handmade and constructed in such 
a way that there are four coin slots over different sized parts 
of the bank each with their own compartments, which helps to make 
the 10/10/10/70 ratio vividly apparent and easier to understand.

Lori also put together a beautifully illustrated book that can 
also be used in teaching young children the importance of saving, 
investing, giving, and making wise decisions about spending 
money. It is called Money Mama and The Three Pigs. The book is 
accompanied with a read-along CD narrated by children. It 
presents these basic financial literacy ideas in ways that even 
children as young as two can begin to grasp.

Both these products as well an allowance chart that has 
instructions on how to determine what a child should receive 
(along with examples of daily chores) are available on the Center 
for the Improvement of Child Caring website ( 
http://ciccparenting.org/CatalogItemList.asp?c=98&cid= ) or by 
calling 1-800-325-2422.

Summing up, here are 13 specific things you can do to be a 
financial mentor to your children. 

 * Begin early in teaching your children the value of money. 

 * Use four piggy banks in which your children can keep their 
   money – one bank for monies they will spend for themselves, 
   one for saving, one for investing, and one for the money 
   they will give to charities, causes and disaster relief. 

 * Teach them about saving and interest. 

 * Teach them about investments. 

 * Teach them about charities and causes they can support and 
   about other ways they can use their money for humanitarian 
   purposes. 

 * Have your children earn their allowance. 

 * Teach them how to generate other sources of money. 

 * Discuss the purchases your children want to make with their 
   money and help them make wise decisions. 

 * Give and read books on financial literacy to children. 

 * Give and play games with your children about financial 
   literacy. 

 * Orient them to financial literacy websites for children. 

 * Draw their attention to your own budgeting, checking, credit 
   card, saving, investing and giving activities. 

 * Involve your children as your assistants in managing 
   household finances, saving, investing and giving.
 

Kerby T. Alvy, Ph.D. is a nationally and internationally 
respected authority on parenting and parent training. He 
is the executive director and founder of the Center for the 
Improvement of Child Caring in Studio City, CA. The center has a 
variety of parenting books, videos and other products available 
on its Web site http://www.ciccparenting.org  On his blog, 
http://www.EducatedParenting.com, Dr. Alvy addresses a variety of 
parenting topics, issues, and trends. Dr. Alvy is available as a 
consultant, speaker, and media guest. For more information, go to
http://www.DrAlvy.com  To sign-up for Dr. Alvy's  free Effective 
Parenting Newsletter, go to http://www.ciccparenting.org  and 
click on "Add Me".