Imagine talking to an 18-month-old about financial matters. One expert says research shows children can measure money at an early age.
Joline Godfrey, the author of "Raising Financially Fit Kids," said there has been a recent shift in how people look at finances.
"People are rebooting their family values in terms of money in a whole new way," said Godfrey, who calls the current economic downturn a "national teachable moment."
She said parents need to start talking. "So you start with a conversation about what was the light bill last month? What's the car payment? How much does it cost to put gas in the car?"
As children grow, Godfrey said, parents put those lessons in context. By age 4 or 5, consider an allowance.
"Kids who will say 'That's my money,' well the proper response is 'No honey, this is your practice money,' " Godfrey said.
Older children, who show good money management skills, earn a raise. Parents then use the extra cash to teach children about saving and philanthropy. She warns it's never too late for a dose of reality with dollar signs.
"For today's 20-something, the tyranny of the credit score is hammering away at them," said Godfrey, who stresses college students need good credit to buy a car, rent a apartment and at times even land a job.
It's a win-win for parents.
"If you invest in your child's (financial) education now your retirement is going to be better because the biggest problem facing America right now is the subsidy of adult children," she said.
Bottom line, parents must decide whether to raise a financially smart child today or help them face a lifetime of money mistakes tomorrow.
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