Teach Kids The Value Of A Dollar

Financial Guru Dave Ramsey Explains How

(CBS)  Teaching kids how to save and spend money wisely can be a tough task, particularly if you struggle with finances yourself.

That's why The Early Show asked financial guru and radio host Dave Ramsey to help out.

"You can just be real with your kids," he advises co-anchor Rene Syler, "Just go: 'I'm not perfect at this either. But I'm going to make sure you learn more than I did.' So you could still engage the subject even though you don't feel totally adequate."

One of the most important principles children need to learn about money relates to learning how to work.

"I'm not talking about Hitler's boot camp for kids or something. But they do need to learn to work," Ramsey says. "Graduate from high school with something more than the ability to open a bag of Doritos and play Nintendo. That's a bad plan. Work creates money. I meet 54-year-olds that haven't got that one down."

The most common question he receives on the topic of kids and money is: Should I pay my child an allowance? Ramsey's answer is yes and no. He believes parents should give their children a "commission."

"Work - get paid; don't work - don't get paid. Everybody is on commission," Ramsey explains how he handles the subject in his family. "Try not coming to work for six weeks. Work gets paid; don't work, don't get paid. When they earn those dollars, and when you're 4, and you clean up your room, it really means mom cleaned up the room and you did two toys. When you're 14, it means you cleaned up your room. But still, we got the money caused by work, and then, we have teachable moments on how to handle the money they earn."