Teach Kids The Value Of A Dollar

Financial Guru Dave Ramsey Explains How

(CBS) 
The difference between allowance and commission - considering a parent can withhold allowance if the children don't do their chores – is the word allowance, Ramsey says.

"Am I going to make allowance? Are you deficit somehow? No. They're not deficit. They got the ability to kill something and drag it home, just like mom and dad," he explains.

In addition to specific ideas for parents, he has a line of books designed just for kids. Three new books on shelves this month teach kids about debt, integrity and contentment. In "Financial Peace Jr." he stresses how to teach about giving, saving and spending their commissions. Ramsey suggests putting the money into three separate envelopes or glass jars. They should be marked "giving," "saving" and "spending."

Ramsey explains, "What happens is, when little Johnny or Susie gets paid, we break the money up. Put some in giving. That way they're giving money they earned. If I just hand my son a little bit of money as he heads into church, he's just a currier. He's not giving. And saving, then they can have some goals that they can save up for. Of course, spending. You buy Celebration Barbie a little bit different when you saved for it."

In the saving category, Ramsey encourages establishing long-term goals. He says, "Around our house we told our teenagers we're not buying cars. We've been blessed financially so we'll match what you save. So early on, they had to start saving for cars."

He notes children need to have a concrete goal and they need to be excited about it, otherwise they will not be eager to save their money.

Finally, if you are having trouble teaching your children that you are not made of money, Ramsey says, try saying "No" to them.

"I mean, "no" is a possible answer," Ramsey says. "Put your tongue toward the roof of your mouth, release air - "No." We have to teach our kids that. Some parents have never told their children that. We're in a very affluent society today. Just 'No' is an OK thing. I understand things you don't. I am older than you. I'm going to teach you with things like this. Today, the answer is just, 'No,' deal with it."