Step 1 of Jean Chatzky's 6 Steps to Raising Money-Savvy Kids offers you a new way to view how and what you provide your children.
Although some interesting new research has shown that there is an innate component to a child's money proclivities—it goes a long way to explaining why one of your children spends every penny that passes through his or her fingers while the other can't bear to part with a buck—a great deal has to do with what you teach them. This sort of education, you'll be happy to hear, has far less to do with demonstrating how to read the stock pages than it does with how to make good choices. In other words, raising money smart kids is all about being a good parent rather than being, say, Warren Buffett.

First things first: Are you spoiling your kids?

As an adult, there's one thing you know for sure about money—it's a limited resource. And yet, that's a message we have a tremendously hard time passing along to our kids. Many of us—often because we feel parental guilt for hours working (or playing) outside the home, away from them—give our kids most of the things they ask for, despite the fact that we may not be able to afford them.

Research has shown this is not just bad for your pocketbook. It's bad for your children. In her book, Born To Buy, Juliet B. Schor recounts her study of 300 fifth- and sixth-graders. She found those who are mega-consumers by this age, who can't be pulled away from the TV, the Internet or whatever technology you've purchased for them, are more likely to have problems with boredom, depression, headaches and stomachaches. And it gets worse when they get older.


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