Debt Plagues Kids, Too

In our credit-happy culture, debt has become a widespread problem, even among young people.

But, you can help prevent your kids from getting into financial hot water by teaching them the value of money and fiscal responsibility at a very young age, says financial planner Wendy Overton of Los Angeles. To begin with, Overton and others recommend that children be given jobs around the house with wages, rather than an allowance.

"Making your kid work for money, instead of giving them an allowance simply for existing, teaches them that the only way to get money is to work," Overton says.

Structuring things this way is more realistic than doling out an allowance, says real estate developer Brett Goldstone, also of Los Angeles.

"It's also important to teach children delayed gratification and that they are working around the house in order to save money rather than spend it," he says.

Overton suggests giving your kids household chores as soon as they're old enough to be responsible for them.

"Age 8 seems to be a good time to start," she says, "although some kids mature earlier and can take on chores, such as feeding the cat or dog, at a younger age."

How much you pay your children or whether you give your teenagers credit cards depends on the family financial situation, says Overton.

"If your daughter's friend gets a much bigger allowance than the wages you give yours, explain that wealth and budgets vary from family to family," Overton says.

"People can survive without credit cards," Overton points out. "Young people started businesses and went off to college without credit cards for ages before credit cards came on the scene."

You can always encourage your children to get a job outside the home if they express interest in earning more money. For younger kids, dog walking, tutoring neighborhood children, paper routes, raking leaves, shoveling snow, baby-sitting and washing windows are all potential jobs.

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Family insider Harry Stein wants his kids to handle money responsibly, too.

Leave Debt in the Dust with your own financial map.