Raise your hand if you’ve made a bad money decision in the past six months. Now put your hands down. Raise your hand if you’ve used one of those decisions as a learning opportunity for your child. Not many hands are popping up, am I right?

This is the challenge called Parenting and Money. It’s a subject that’s tough for Moms & Dads to teach because many of us haven’t quite mastered it ourselves. It might be an area of life where what you’re saying isn’t matching up with what you’re doing . And this is where you must come clean – by getting your own financial habits under control. After all, Monkey see, Monkey do. The best way to raise financially well-adjusted kids is to establish money behavior that your kids can model.

But before I lose half of you, there’s hope if you’re currently less than perfect financially. The reality is it may take some time to turn your situation around. In the meantime, there’s plenty you can do to show your kids the right way to deal with money even while you’re working on your own financial challenges.

Paper vs. Plastic
Let’s face it, we live in a plastic world when it comes to money. Kids see us using credit cards, debit cards, gift cards, grocery discount cards, restaurant rewards cards, yogurt shop smiley points cards – stop for a minute and count the number of plastic cards associated with commerce in your wallet. (I just counted 17 of my own.) So as a kid, it can be tough to understand how all that plastic translates to dollars and cents, and that’s why you must stop and explain it to them. Be intentional: “I just used my debit card, and now real money is coming straight out of my account to pay for our groceries.” If you leave this unsaid, your littles will chalk up your transaction to pure money magic.

My 9-year old has heard me explain this so many times that she refers to our family’s Elfcu debit cards as “Debbie” cards. She might have created her own name for them, but she understands how they work. That’s what matters.

Once in a while, do your child a favor and pick up some cold, hard cash. Yes, I know you don’t bother with it anymore, but get back in the habit of carrying a little green and using it to make occasional purchases. Better yet, get your son and daughter involved in handling cash and paying for things, which brings me to the next tip.

Give them hands-on experience
Nothing is cuter than a 4 year-old on tiptoe at CVS paying for her own gummy bears. Not only is it sweet to see, it’s a really smart thing for a parent to do with a child of any age. Let your kids conduct transactions, whether it’s with cash of their own, your own, or any form of plastic. When kids interact with cashiers and trade payments for merchandise, they become more aware that an exchange is taking place. “I give you something; I get something.” It’s a dreadfully simple concept, but it only sinks in when they do it themselves.

Tinker with lemonade
Yes, lemonade stands teach lessons about money, business, and entrepreneurism. You know that. It's old news. If you want to weave in some lessons of individuality, marketing savvy, and philanthropy, then push the envelope when it comes lemonade. Encourage your child to make their stand special. Blue lemonade, anyone? Or let customers color their own lemonade at a rainbow-style stand. Beyond product, have your son or daughter think about pricing, placement and promotion and how these elements can impact their success. And it’s never too early to introduce a cause in a child’s life. What is near and dear to yours? Animals, other children, the elderly? Spark a passion for giving at a young age and donate the proceeds to an organization of their own choice.

Practice the paycheck reality

http://www.youtube.com/watch?v=pfhbux4ksTY

Allowance is the most controversial parenting and money topic. You’ll read a thousand different opinions on what to pay for, how much at what age, how often and what website you should use to track it…and the debate goes on and on. Here’s a take on allowance – pick the parameters that are best for your family, but always treat allowance like a paycheck. This means that you should pay it consistently. If you decide that Allowance Day is Friday, then stick to the schedule. If they spend all the allowance by Monday, the best thing you can do is make them wait it out until Friday. This is the part called Tough Money Love.

If you habitually pre-pay allowance, then their accountability to spend wisely and monitor that spending (early budgeting) is gone, and suddenly you’ve become your child’s first ever payday lender.

Try all the above, and you’ll be on a good start toward raising financially well-adjusted kids. You don’t have to do it alone. Talk to teachers, other parents, and your financial institution for ideas and support.