Sure, they know the color of money, but not where the green comes from and how fast it disappears. Learn the right way to get kids to spend less, save more, and help your family manage the high cost of living.

The ABCs of Money Management: If grownups have trouble spending smart, think about the guidance your kids need. Experts say you can give them a helpful hand with these 5 tips.

– Talking about trade-offs. Explain to your kids that managing money requires setting priorities. Instead of saying, “We can’t afford that, “which might scare them, say “It’s not in our budget right now” or “There are more important things we need.” When you do splurge on something big, tell them the ways you’ve cut back in order to afford it.

– Introducing them to plastic – the right way. Open a checking account for your kids when they turn 15 or 16 (bank regulations vary) so they can learn how to use a debit card. Balancing a checkbook is one of the chores of life. Hold them accountable for it every month.

– Having them spread the wealth. Help your kids divvy up their earnings by suggesting they spend 40 percent, save 50 percent and give the rest to charity.

– Encouraging an open dialogue. Ironically, parents who are careful to talk to their kids about hard stuff – like sex and drugs – don’t always explain the simple concepts of budgeting. One survey found that 79 percent of college freshman say they’ve never had a conversation with their parents about managing their money, and 23 percent say it’s OK to blow as much as $500 without first checking with mom and dad. Start a two-way conversation as soon as your kids start working, making your spending expectations – and limits – perfectly clear.

– Reminding them what money can and can’t do. Today’s teens live in a world where shopping is widely considered a harmless recreation, and it’s easy for them to think that happiness is something they can buy at the mall. You’ve got to explain otherwise – and set a good example yourself. Keep retail therapy – theirs and yours – to a minimum.

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