Teaching Kids Financial Responsibility

I wondered: when did a toy store outing become a source of agony? This must be what happens to all of us, I suppose, when we realize that we can't afford everything that's out there. Children are just more adept at wearing their emotions on their sleeves.

It seems there's so much more to buy than when I grew up as a child in the 1970s. Sure, children were still tempted by materialism, but I don't recall pining for video games at $50 a pop -- or the latest $300 electronic gadget weighing heavily into my youthful social life. Everyone in my children's circle, it seems, has either an Apple (AAPL Quote - Cramer on AAPL - Stock Picks) iPod, an X-Box or a Wii.

Despite my efforts to shield my kids from commercialism, it's hard to avoid encountering marketing messages even in our own home when watching television or using the computer.

Online shopping is a huge convenience, but it also means my children's sneakers magically appear on my doorstep. It's not obvious to them that I've just plunked down $140 on three pairs. Yes, I used a credit card, but I still must pay the bill.

Spending Responsibly

But I won't stop my efforts to raise children who will hopefully spend responsibly -- and stay out of debt. Here's what I do:

Make them wait. I ask my children to wait 24 hours if they see an item they want online. The goal is to avoid impulse spending. They often don't want it by the next day.

Pay cash. When they do want an item from the Web, I require them to sit next to me as I process the transaction, and pay me immediately with cash they have saved from allowances. The strategy demonstrates that credit cards aren't a free ride.

Avoid recreational shopping. You won't find my family in a mall or discount store unless we absolutely need to buy something that's impractical to purchase online -- such as cleaning supplies at Target(TGT Quote - Cramer on TGT - Stock Picks).

I always announce the purpose of the trip in advance and explain that I won't be purchasing goodies that day. We don't always leave the store with happy faces, but at least we establish that shopping sprees aren't an everyday occurrence.

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