Most kids learn the basics of money and making change in grammar school, but probably won't learn how to manage money unless they choose finance as a career path. That means it is up to all of us to see that our children reach adulthood prepared to face life's fiscal challenges. My favorite thing to hear from my kids when I told them I didn't have the cash to buy them what they wanted is 'you still have money just go to the bank and take out cash from the ATM!' This is when I knew it was time to start the basics of how money worked!

I made the choice a few years ago to open life policies for my two younger children. Some reaction's I got from my family was; why would you open life policies for your kids? To them it seemed morbid. Well, the answer is simple. I opened the life policies for my kids to save for their college fund. Some life policies allow you to add money so you can accumulate cash value. This cash value grows with time and will allow my kids to use it for college when they are ready. This money is also accumulating tax free, which is a huge benefit. I will talk more about insurance and it's benefits at another time.

At the time that I open these policies, I let both my children know what they were for and gave them a simple lesson on how their policies worked. Now, whenever I mention the life policies, my son asks, "how much money do I have now?"

For Christmas, I decided to buy both my kids the book; Rich Dad's Escape From The Rat Race, by Robert Kiyosaki. My daughter zipped through the book in a couple of days and could tell me exactly what it was about. I was amazed that she learned the exact things I did when I read the adult version or Rich Dad, Poor Dad. This was fantastic!

When I was a child, I was not taught about money. All I knew, as a child was money was tight. I could feel it, but had no idea what that meant. When I left my parents house to go off on my own, I remember learning very quickly that you could not spend your paycheck on the weekend and still have money to eat for the next two weeks! I will never forget opening two credit cards at the age of 18. I thought someone had given me the keys to financial freedom. I quickly maxed both cards out to furnish my apartment. Then, when the bills came in the mail, I was surprised, and thought; how was I going to pay for this?

Through my own trial and error, I decided that I would make sure that my children would have a financial education before they left home. The younger you start the better.

So my question to you is, do you take time to educate your children about money?

Here are some suggestions:

1. Get a piggy bank and start collecting coins and fill it up. Once they have about $10-$20 accumulated, open a savings account with your child. Make deposits together and be sure to make it a very positive experience. Some banks have a savings account just for kids.

2. Buy books that will educate them at their age level. I highly recommend the Rich Dad's Escape From The Rat Race when they are old enough to read.

3. Explain to your children that money is earned by working, and that you can only spend what you earn. Very important to know before you leave home!

4. Give your child an allowance. You might consider paying your children for chores outside of daily duties, such as helping to rake leaves or wash the family car. If they are anything like my kids, they have a goal in mind and will help out to accomplish that goal. This makes doing the chores more fun!

5. When your children get older, you can then advance into teaching them about a checking account. Teach them how to balance a checking account so they know how to do it on their own. This will stop the, I still have checks left, so I must have money in the bank, syndrome!

Teaching your children about our financial system may seem daunting, but you can help put your child on the right track by encouraging smart habits now.

Is it worth your time and effort to help your children learn about money? YES, answering your children's questions honestly and in terms they'll understand can help them begin life on sound financial footing.