There are several money gurus for adults (Robert Kiyosaki - "Rich Dad, Poor Dad," David Ramsey - "Total Money Makeover", David Bach - "Automatic Millionaire," to name a few). Of course, most parents with young children who are learning from these gurus eventually get around to wanting to impart this new-found wisdom to their children while they're still young. Also, there's the huge number of conscientious parents who are in debt and who are on a path of getting rid of their debt. And then, there's the self-aware parents who have become introduced to, and may be continuing on the path of, replacing a poverty-focused mentality with an abundance mentality (e.g. The Secret, Law of Attraction, and various faith-based and secular abundance teachings). Of course, America is very well-poised to finally leave the poverty mentality of The Great Depression, as the third or fourth generation is being born now. Finally, Americans are extricating themselves, bit by bit, piece by piece, of the deeply embedded beliefs and language of The Great Depression, which are negative and counter-productive to building financial wealth.

 

Maybe you read "Rich Dad, Poor Dad," and a light bulb went off about how you look at money, and now you are at a loss of how to teach your children about money. Maybe you don't yet know how money works or what ROI means, and don't have the time to go through a long learning curve, but want to capture the opportunity to teach your kids about money now while they're young.

 

Here are 7 key points that you must know when teaching your kids about money:

 

1. Financial Wealth is created when your money makes money (rather than you making money).

 

2. ROI means Return On Investment. It is your Return On Investment - that is, the money that your invested money makes for you - that defines your wealth (rather than your earnings or your capital gains). For more teaching on this topic, read or listen to "Rich Dad, Poor Dad," and/or play "Cash Flow 101," to learn about getting off of the Rat Race.

 

3. Thinking that you'll get out of debt and become wealthy when you work harder, get a raise, make more money, have greater commissions, or make some landmark profits in your stock trading account, are just lies that the 20st Century American society has created. Wealthy parents know differently. Wealth is created by ROI, which comes from having your money make more money for you.

 

4. Giving is part of gaining. When you have Returns On Investments, it's important to keep the flow of money circulating - by more investments, more spending and more donating (charitable giving).

 

5. Good children's banks have 4 parts - Investing, Donating, Spending, Long-term Savings (to buy Christmas/holiday gifts, birthday gifts, Father's/Mother's Day gifts, etc.), and properly take care of money (rather than scrunching up bills and jamming them into a tiny slot). Why 4 parts and not 3? Try dividing up Grandma's $20 bill birthday gift to little Jimmy by 3.

 

6. Allowance only works if you have a complete plan to teach wealth habits to your children. Allowance alone, without more, won't do it. Allowance and chores are a dangerous combination. Gratitude in children doesn't depend on whether kids have to do chores in order to get an allowance - it depends on a lot of important things, but not that.

 

7. Children actually ignore you when you start talking to them about money (a.k.a. trying to teach them). Children learn by doing. Children get strong wealth habits by doing the same thing over and over and over - in an interesting and creative way.

 

If your family's plan for teaching your children about money is lacking in any of these 7 areas, fear not. There are lots of resources on the web and in bookstores to help you get your children on a good financial wealth path. Find the one that works for you, with your style and where you're at in life. Now you're armed with these 7 essential points to evaluate which tools will be best for you to teach wealth habits to your children, even if you're not (yet) wealthy.