by Parenting Expert Dr. Michele Borba

Do you feel like you are your kid’s ATM machine?
Does your child spend faster than he saves?
Do you worry that you’ll still be delving out an allowance when your kid is 45 years old?

A parent’s concern around their kids’ inabilities to handle money is a legitimate worry. Research also shows we’re not doing such a good job in teaching our kids basic money management skills. Fewer than half of parents surveyed said they teach their 11 to 14-year-olds how to keep track of their expenses or set a budget. 180,000 U.S. kids aged 18 to 24 declared bankruptcy last year. The truth is we can begin to teach our children money management skills when they are young.

Here are 8 simple solutions to help your child learn good money management habits to give him or her (and you!) a more financially secure future.

1. Be a good role model. Kids always look to us as the example to copy. If you always are overdrawn, why expect your son set a budget? If you buy clothes impulsively why should you expect your daughter to wait for the sale? If you don’t talk about the value of money, don’t think your child is ever going to learn that money doesn’t grow on trees. Be the model of money management you want your kids to copy.

2. Use real-life examples. Show your daughter how you balance your checkbook. Talk to your son how your credit rating is checked before purchasing that car. Show your kids the household bills so they know how much electricity, gas, water, phone and cable cost. You don’t need to reveal your income or savings but you should use real opportunities to help your child understand money.

3. Don’t give loans. Kids learn money management by trial and error. So don’t bail her out if she “overspends” and runs out of money needed that week for the movie. If you do give an advance, consider charging interest. She’ll soon figure out that borrowing is pricey. You can discuss pay for extra jobs, such as mowing the lawn or washing the car- especially if the child is saving for a big or special item.

4. Set a capped budget. Allocate a certain amount for expenses like a back-to-school wardrobe. As an incentive, explain that if there’s money left over she can pocket it. Make your kid contribute to those nonessential “have to have items” like the trendiest sneaks or those pricey jeans. You can pitch in some, but he has to make up the rest.

5. Give an allowance. One of the best ways for kids to learn to manage money and keep a budget is by giving allowances. How much to give depends on your child’s spending habits and maturity, and your comfort level. And encourage your child to always save a portion of that allowance (as well as money that is a gift).

6. Keep a spending log. From the time your child can write and count, give him some kind of a simple recording book to keep track of his money. A young child can track his earnings (including holiday money gifts); an older child can record his earnings and expenses. Gradually explain the “break-even point” so your older child begins to learn the necessary skills for balancing a checkbook, keeping a savings account and maintaining a budget.

7. Teach smart buying habits. Encourage your child to read consumer reports online before purchasing that pricey gadget. Ask your daughter to list what she needs before hitting the mall, then stick to it. Tell your son to check the newspaper for sales. Let your child choose among items by comparing prices. Give your child a clothes budget by having her estimate costs, and then honor it.

8. Encourage an entrepreneurial spirit. Help you child set up that lemonade stand. Print flyers that say he’ll mow the neighbors’ lawns. Offer to baby-sit. Walk the neighbor’s dog. Your child can learn from a young age that how you earn money is through hard work. Not only will you encourage your little entrepreneur but you’ll also help him appreciate the value of money.

If you haven’t taken your child to the bank to help him open up a savings account (for younger kids it can be a Holiday Savings Account) and checking for an older kid, write it down in your “To Do” list. The sooner our kids learn the value of a dollar, the most financially secure they will be. It’s the one lesson we may not be teaching our kids and the one in today’s economy they just may be needing the most.