How to Teach Financial Responsibility to Kids

Start little kids out by giving them toy money to buy items in a play grocery store. This will show them they need money in order to purchase products. You don't need to purchase an elaborate play set for this game, since kids will enjoy using empty boxes, bottles and other recycled items. If you prefer, you can make a play clothing store, bookstore or use stuffed animals to create a pet store.

Read stories about financial matters to your elementary-aged children. "Alexander, Who Used to Be Rich Last Sunday," by Judith Viorst, is a humorous lesson about wasting money, while "A Chair for My Mother," by Vera B. Williams, is an uplifting tale of a family who works and saves together toward a common goal. "Sam and the Lucky Money," by Karen Chinn, touches on the subject of charitable giving as a boy decides what to do with his Chinese New Year gift.

Give your kids an allowance starting around the time they go to kindergarten. Make sure the allowance is tied to age-appropriate chores, though, so they get the idea that money is something that must be earned. The amount is up to you, but it should increase, along with the number and difficulty of the chores required to earn it, as your child grows older.

Take your children shopping with you. Talk about how much each item costs and whether one brand costs more than another. Decide whether it's worth it to spend more money buying a name brand you recognize from the commercials or whether a less expensive one might be just as good. Teach your middle schoolers to look look at the price per unit, and ask them to use this information to help you find the best deals.

Encourage your kids to save up for big-ticket items they want, such as new iPods, expensive sneakers or concert tickets. For any items where you planned to foot all or part of the bill, set up a savings matching program. For example, you could tell your teenager that, for every $100 he saves toward the purchase of his first car, you'll chip in $200.

Discuss the family budget with your children. Talk about all of the different things you need to pay for -- rent, electricity, groceries, gasoline, doctor visits. Don't stress them out with your financial woes, but do discuss positive solutions with them. Brainstorm about how you as a family can save more money by vacationing closer to home, purchasing used clothing, growing your own vegetables or any other ideas you can agree on.