How do I set up good financial habits with my children especially in this bad economy?

I was truly fortunate to grow up in Manhattan with parents that made me feel like I had everything even though they were just making the most out of what modest means they had while staying fiscally responsible. One of the best things I think you can do for your children is to make money, whether you have it or not, a very neutral topic in your home. Leave your kids out of most of the financial details and focus on what you value instead. Talk candidly to your kids about the daily choices you make. Try to talk about an item in terms of how important it is to you or why it is a necessity versus how expensive or cheap it is. Below are some tips on how you can set up good financial habits early on with your children.

Teach the value of money early on - Allow children to touch and encourage using "play" and real money. Have your children describe coins, compare and contrast size, feel and color. I always make my children identify any money they find in the couch by name and value before they drop it into their piggy bank. You can make it even more challenging for older children. For example if they find a quarter ask, "How may of those coins would equal $2.50?"

Always make your purchases about choice even if you have the money. All purchases have a time and a place. Identify why you are making the purchase. Is it a real need? Do you want it to, fit in socially? Is it to feel better? Who will it make feel better? Will it enrich your families lives?

When you can't afford an item for your child do not drive it into your child's head. Make it about choice rather than claiming it as something you can't afford. If it is something you really want your child to have, look for alternatives. Can something else be given up? Can you barter for the item? There quite a few bartering sites around like craiglist and www.swapthing.com.

Make sure your child has a long term savings plan (bank, account, cd, 529 plan), a short term savings plan (piggy bank money, allowance, etc.) and include in your child's financial plan something that many people believe is the law of money, charity. Many experts in the finance world agree that if you wish to make money you must send some out into the universe for a good cause. Neale S. Godfrey's book, Money Doesn't Grow on Trees: A Parents Guide Raising Financially Responsible Children, is a super choice!

Perhaps if we teach our children the value of money we can save them from the same fate we are living through now.