Make money part of family discussion

Nathan Dungan, founder and president of Share Save Spend, admits that teaching kids about money "can be like drinking water from a firehose," given that it's such a broad topic that encompasses saving and spending, wants and needs, financial goals and more. However, he believes the earlier parents begin those conversations with their kids, the more naturally "money talk" will become part of daily family life. ¶ Since April is Financial Literacy Month, we asked Dungan, author of "Money Sanity Solutions: Linking Money + Meaning," for tips and suggestions about how to help your kids cultivate sound financial skills.Q What is your theory about giving a child an allowance? At what age?

A An allowance can be a powerful teaching tool. I think you can definitely start around 5 or 6 years old. If you are intentional about giving them money -- in other words, don't give it without expectations -- it can give kids a sense of confidence, awareness and responsibility. If you just give them allowance randomly, it's not effective. Family chores are family chores, but if you have a "job jar" where kids can pick a task to do, they will value the money they've earned because they worked for it.

Q Do you think it is more challenging for today's parents to teach kids about money than it was for their parents?

A Society today is super-skewed toward spending and the message about sharing and saving just isn't there. I've asked elementary school kids in my workshops what they learn about spending and saving in school and the answer is generally "not much." So that means it really is on parents. If you abdicate your role to teach kids about money, the void will be filled by the culture of consumerism. Parents are the best ones to shape the narrative about money for their family.

Q What are some ways for parents to integrate good financial messages into everyday life?

A This isn't a topic you have to spend two hours on every day. You can build the subject into your daily family life -- going to the grocery store, conversations on how money is spent at home on items like technology, maybe talking about a family vacation. Involve your kids in those discussions. I'm often surprised by the wisdom young people have about money and I think adults can learn from that.

Q Many families have been adversely affected by the economy in recent months. How can parents help kids understand a difficult financial situation?

Offer messages of reassurance and tell kids that as parents, you are going to make the best decisions you can for the family. This is another opportunity to invite them into the discussion -- talk about ways the family can save money like making sure all lights are turned off when they aren't being used or eating all the food in the refrigerator and not being wasteful.

Q As kids get older, they are likely to become keen observers of ways their friends spend money. Any tips on how parents can handle this?

A Kids definitely enter the world of "comparonomics" and it's a game no one can win. In our consumer culture, it will always be about wanting to have more, and parents should be realistic with kids about what their family can afford.

It's important to have conversations about the difference between wants and needs. Talk to your kids about what you value as a family when it comes to spending money. Encourage them to save for something that is important to them, just as the family might save for a vacation or something that matters to everyone in the family.

If parents have been instilling healthy financial habits in kids throughout the years, it will definitely serve them well as they eventually become responsible for their own spending and saving. It's a lot easier to do it that way than for kids to unravel unhealthy money habits when they are in their 20s and beyond.