* Do you pay your bills on time to prevent late fees and possible dings to your credit score?
* Do you balance your checkbook regularly to avoid overdrafts and bounced checks?
* Have you set up an emergency fund -- and are you disciplined enough not to tap it for everyday expenses?
* Are you sometimes caught off-guard by bills you should anticipate?
* If your family is experiencing financial difficulties (layoff, foreclosure, massive bills), are you having age-appropriate, non-traumatic discussions about the need for everyone to make sacrifices?
* Do you complain about your job within their earshot or say you'd rather stay home with them but need to earn money? You could be setting them up to resent both work and money.
* If college is on the horizon, have you had frank discussions about how it will be financed? Have you started a college savings fund, explored student loan programs or discussed contributions they'll be expected to make?
* When your kids constantly break or lose expensive items or run through their allowance early, do you repeatedly bail them out with no consequences?
OK, that's a lot of potentially negative outcomes. Let's concentrate on a few positive actions you can take that will encourage responsible financial behavior in your kids:
Use allowances to teach your kids how to handle money wisely, not as a tool to reinforce good behavior. Track their discretionary (toys, candy) and non-discretionary (school supplies, clothes) expenses. Depending on their ages and maturity, decide which expenses they should be responsible for managing, and dedicate a reasonable amount for each category in their allowances.
A few other suggestions:
* Use allowances to teach important life lessons. For example, build in dedicated percentages they must set aside for savings, charity and investments -- then involve them in choosing how the money is spent.
* When you use an ATM explain that it's not free money but rather has been earned and saved by you.
* To encourage saving during these times of low interest rates, offer to match their savings at 50%.
* Teach by example. If money is tight and you have to deny your kids non-necessary items, give up something of your own that they know you'll miss.
* Open a 529 Qualified State Tuition Plan or a Coverdell Education Savings Account to start saving for your children's education -- and let them know about it well before you start discussing college choices.
Father's Day is when children traditionally express love for their dads. Show how much you care in return by starting them out with a healthy, realistic attitude toward personal finances.
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