The goal most parents have for their kids is that they will grow up to become educated, well-adjusted and contributing members of society.

But let’s face it, we’ll settle for out of the house and paying their bills. So how can we help our kids to learn money smarts?

The single biggest equation in life is how to make money. Good careers require good educations, be it a college degree or technical training.

Good educations open doors to good money, and that is when making the right decisions with money — and teaching kids to do the same — solves the equation. Here are my top five things every parent should do, right now, to prepare their kids to manage their money:

5. Talk about money

It surprises me how little kids know about money, especially teenagers.

They don’t understand how everyday finances operate, like the actual cost of a new shirt, dinner out or their cell phone.

Are your kids aware that when something costs $29.99, it actually costs more?

Talk to your kids about hidden charges — sales tax, shipping fees, service fees, tips, etc. Without this knowledge, they can’t move on to No. 4.

4. Make a budget

Money comes in, money goes out — and it flows out more easily than it flows in. Teach kids how to handle their finances.

Once they realize of how much things cost, they can learn how to plan for them. Four tips for budgeting:

  1. Start with the basics — rent, food, electricity. Water doesn’t magically appear for free when the faucet is turned on.
  2. Break it down to a weekly budget. Smaller, shorter and attainable goals are more likely to succeed.
  3. Have children write it down and give it to you. “I spend X dollars a week in gas, X dollars a week in food and X dollars a week in emergency money.” If a child is involved in any activities with fees or expenses — even if you’re providing the funds — have them figure it in so they have a clear picture of reality.
  4. Let them pay the bills. Even if you’re funding the payments, it’s very important to let your kids go through the physical process of paying bills.

3. Have kids earn their own money

There’s nothing like a good, old-fashioned job!

Be it babysitting or mowing lawns, when kids start earning their own money, they gain experience, which creates wisdom.

Then it becomes easier for parents to say, “You have some money — if you want it that bad, you buy it!”

The proud moment comes when kids realize they don’t have enough money for something they want, and they start making choices on their own.

2. Teach them about credit

I am certainly not advocating college students (or younger) go into debt, but they need to know how decisions they make now affect their future.

As a banker, one thing I am often asked is what comprises a credit score.

One day, children are going to need credit. They definitely will need to know how to establish good credit and how to avoid the pitfalls of bad credit.

1. Do it now!

Don’t wait. Good money habits are learned and practiced over time.

How often do parents hand over a credit card to a kid and say, “Now you be smart with this,” and then are surprised when they see the bill?

Many adults still are learning how to be responsible with their own money.

There is no way to expect a child to get it right as they’re walking out the door to college. Good money communication needs to come early and often. After all, children will have this privilege and responsibility literally for the rest of their lives.

Ask a bank about financial resources available for kids. For more savings tips and other financial articles, go to

This information was provided by RCB Bank Vice President and Loan Officer Steve Elliott, a father of two.