Kids & Money

The experts share their favorite advice

I’ve never been keen on making big, bold New Year’s resolutions. They’re usually trashed or forgotten before I flip the first page on the new calendar.

Instead, I thought it would be more meaningful to offer you a fresh twist on some old themes.

With families facing so much financial uncertainty today, I asked a handful of financial experts to share their favorite piece of advice that could help teach your kids practical money skills or spark meaningful changes in how you save for college.

• Sam Renick, author and founder of It’s a Habit, a financial education website: “The most powerful lesson and gift a parent can give a child when it comes to money is getting them in the habit of saving. Why? Saving has enormous benefits. It builds esteem and character. It sends children an unmistakable message that their future is worth investing in. It helps children learn to delay gratification. It teaches children there are other purposes for money besides spending. It protects children (and adults) from poor spending choices. It places children on the path to more freedom, more choices, more security and more independence.”

• Joseph Hurley, founder of “Get a 529 (state-sponsored college savings account) started. Even if you are not convinced a 529 plan is the best vehicle for your family, or you don’t fully understand it, set up a 529 account with automatic contributions, perhaps only $50 per month.”

• Susan Beacham, founder of the Money Savvy Generation: “Work. The money kids earn is much harder for them to spend. Consequently, kids stop, think and reflect more when it is their money they are working with — and not ours. Kids will spend our money all day long; theirs, not so much. So let them work. Think of a job as a paid-for extracurricular activity. It’s not just money they earn, but knowledge of the work world, the importance of being on time and being responsible for their own performance.”

• Bill Hardekopf, editor of the website: “We train our kids to ride a bike, drive a car, even potty-train them, but we don’t do a very good job of sitting down and teaching them about money and how to be financially prudent. We need to take more time to discuss how to save, how to budget and the pitfalls of credit. While teenagers are still living under your roof, take the opportunity to sit with them and go over your credit card bill.”

• Kal Chany, author of the Princeton Review’s “Paying for College Without Going Broke”: “Take advantage of education tax credits. In January, be on the lookout for any IRS Form 1098-T sent by the school to any student enrolled in a college or other post-secondary institution during 2011. This form is used to determine the amount, if any, that can be claimed on the 2011 federal tax return for the American Opportunity or Lifetime Learning education tax credits.”

Parents can claim up to $2,500 per eligible student for the American Opportunity credit, while Lifetime Learning provides up to $2,000 per return.

The last word goes to Jason Alderman, with the Visa Practical Money Skills program: “With my own kids, to help teach them about money management, I provide a running narrative of what I’m doing and why.”

For example, while grocery shopping, Alderman tells his children, “I’ll buy this can of tuna because it’s 25 cents cheaper and we can put the difference in our vacation fund.” Or, at the bank he’ll explain, “We keep our money there because it’s safe and they pay us a little bit for letting them hold it for us.”

His lessons aren’t heavy-handed either.

“I find that sharing my thought process helps instill our family values about money as well as teach them the mechanics,” said Alderman.