I believe that other than teaching your kids typing, and the love of reading, the other important skill you want to insure is the basics of money. Here are some I would teach my own.

A DOLLAR SAVED IS A DOLLAR EARNED. I believe it is important to teach children frugality, and knowing to save money. I don’t believe we should be giving our children pocket money just enough for their needs. I also don’t believe that we should be saving the money in behalf of the children as if they have no choice. I believe we should be giving them some extra money, and monitor how they spend it, and if they are not saving some amount of it, then we should sit down and have a heart to heart talk. It is not enough that we save on their behalf, it is best that they save money ( even if they have a choice on spending it), because the saving habit have to be formed. If we are concerned how they will handle much larger sums of money in the future, your best course is to let him handle small money now.

TRAINED THEM BY PROVIDING THEM A CHOICE. I believe in giving children a choice, and letting them know that they can decide what they want to do, even if only its only small decisions. For instance, let us say that your kid wants to have that robot game, and he also wants that trivia game. My ideal scenario would be. That robot game is 25 dollars, that trivia game is 28 dollars. I will give you 30 dollars, and you have to decide whether you want that robot game and save 5 dollars, or buy that trivia game and save 2 dollars for other needs. Children who know they have a choice, and they have to enjoy or suffer from their choice invariably will also grow up to be more confident and successful.

A DOLLAR TODAY IS NOT THE SAME DOLLAR TOMORROW. It is important that children understands that money can be used to earn more money, and if they sacrificed now, and save the money, it can potentially mean that you will have more of it tomorrow. In a study made in the UK, about 80 kindergarten children were given chocolates, and were instructed that if they would hold on to their chocolates until the end of the day, their small chocolates would be exchanged for bigger chocolates. Some children ate their chocolates nevertheless, while some hold on to it so they can get bigger chocolates. IN some way, that is what happens to real life. As much as possible, don’t buy that car if you are not sure you can afford it, and spend the next 5 years slaving to pay it, with about half going to interest cost. Rather buy it when you really have the money! By the way, there was another study made on the school children 20 years after, and they found out that those that were willing to hold on to their chocolates to exchange with a bigger one were found out to be more successful. The conclusion is people who not only think about the here and now, but the future will invariably know how to delay gratification and succeed more.

How do we do this? Let us say on giving allowances. Instead of buying the snacks of the children and asking them to bring to school, which presents them no choice, I would rather give them allowances. Maybe I should give him 5 dollars a day. That should be enough to buy crackers and juice. If he saves the first day, the second day, having 3 dollars means he can afford a sandwich ( now he’s learning that by saving, he can afford something he could not yesterday) . But maybe I should not give him 5 dollars a day, but rather 25 dollars a week. If he spends it all on a nice toy, then he knows he will have to skip snacks for the next 5 days, so he starts to think hard really that he needs to budget. But I would bring it further. I would tell him that if he can hold off the week because he still has savings, and do not need me to give him 25 dollars on Monday, I would be happy to give him 28 dollars on Friday.

It may be a good way to develop the concept of the value of money over time, and of money earning more money.

The first time I gave my child his weekly allowance, he promptly left it on his table and lost it the first day, and have to go for one week without money. I would say that losing 5 dollars and a wallet was a very good investment for me ( and I’m thankful it happened) in teaching my kids. Next time, he knows he has to be really careful.

INVOLVE KIDS IN MONEY MATTERS EARLY. Get them to do chores where they can earn. We had a small gasoline station before and I was pumping gas when I was eight, delivering oil products when 10. When I was 11, my mother used to ask me to visit customers and collect money, and deposit to the bank. Later, she would give me the deposit slip and the cheque book, and it was my job to balance it every month. I believe in many ways, that gave me the first edge in business.

Teaching money basics can also be fun. I would recommend the game Monopoly. Now, my five year old will know that it is better to buy that 200 dollar property ( where if somebody goes into it, he has to pay 24 rent), rather than get that 110 dollar properly ( where the rent is only 6 dollars). Making them a banker also practices their ability to count money, and compute change. I was pleasantly surprised when my five year old offered to buy one of my properties worth 110 dollars for 480 dollars. If he gets that property, he says, and I listen with amusement, then he can then build some houses and a hotel, and next time somebody goes into his property, he could now charge four times more rent. So, he computed that it was OK for him to pay me more. Well, train them early, and they will surprise you with their understanding.