Suze Orman Money Matters

The back-to-school season seems like the perfect opportunity for every parent to get a grip on what lessons they're teaching their kids about money.

I know plenty of parents who wouldn't earn more than a C- for their efforts. Sure, they mean well, but that doesn't mean they're doing a good job in raising money-smart kids.

School Failure Is Your Opportunity

What's really sad is that this isn't a topic that you can rely on the schools to teach: It's rare for any personal finance or money-management courses to be taught in schools. That makes it all the more important for Mom and Dad to make sure they teach their children well.

The big problem is that parents seem to be blind to the negative and sometimes confusing money messages they send their children. I'm not talking about mangling factual lessons about how interest works or what debt is. That's the easy stuff.

What's hard to understand is how the power you give money in your life and your family's life has a huge impact on how your kids learn to relate to finances. You're kidding yourself if you think that learning about money is just a matter of a few basic math principles; your children pick up far more subtle and powerful messages by watching and listening to you.

With that in mind, here are four dangerous money messages parents unconsciously send to their kids:

1. Be happy to go to work.

After a great weekend spent at home, Monday rolls around and you need to head back to work. Transitions for little ones are hard, and the prospect of losing you to work for the day can create sadness that sometimes builds into a mini-meltdown.

So what happens next is really interesting. You tell your kids some version of the following: "Oh, honey, I hate that I need to leave you, but I have to go to work so I can make money." True as that may be, from the child's perspective they now know what to hate: work and money.

Sure, you can think that as they age they'll grow to appreciate the need (and desire) to work. But I think it's still very important to be ultra-conscious of how you introduce work and money to your kids, and the role you give it in your family dynamic.

2. Don't bank on your kids' money.

The worst way to teach kids about money is to force them to put all of theirs from gifts, allowance, etc., into a bank savings account that you then tell them they're not allowed to touch. This is a classic case of good intentions gone bad: You've now made the bank a bad guy in their minds -- it's where money goes so they can't ever use it.

No 5-year-old can project out to the age of 18, so it makes no sense to tell them that their money is for when they're older. I do think it's imperative that a lot of their money in fact be saved, but you also need to let them spend some of it, too. They have to have a relationship with their money to learn how to be responsible with it.

Be careful with piggybank separation, too. You remove their immediate connection to money when you suggest that they stash what's in their piggybank in a real bank. I think it's healthy to encourage them to have some in their piggybank as well -- it's an important connection for them to have with money.

It's also practical: When they announce that they want some toy or gizmo, they have some cash handy to contribute to the purchase. Outside of birthdays and special occasions, having your child use some of their own money -- however small -- for a purchase is vitally important. It pushes them to embark on a decision-making process: "Do I really want this enough to part with some of the money in my piggybank?" That's much better parenting than bankrolling their every whim.

3. Allowances aren't a birthright.

I hate allowances, or at least the way allowances seem to work in 99 percent of families. As far as I'm concerned, the "you get an allowance just for being you" type should be banished.

Whenever I ask children why they get an allowance, I typically get that kid-specific shoulder shrug before they tell me, "I dunno, just because" or "Because my older brother gets one." Or I get an incredulous look that says, "Lady, are you nuts? It's my birthright to get an allowance."

Not only is such an allowance the wrong message to send your kids, it's a lost opportunity to teach them the true value of money -- and the value of earning money. So, rather than an allowance, try "kidspensation," where your kids earn money in exchange for something they did that you both agreed had value for them and the family.

The key is that it has to be something they did. Kidspensation shouldn't be used as payment for good behavior; that's not something you reward with money, it's simply what you expect from them. And don't set up kidspensation as a set amount; it should vary each week based on what your children achieved.

Have an ongoing conversation throughout the week about chores and jobs they can take on, and negotiate the terms as you go. Or you can set up a time to sit down with them at the end of each week so they can make their case for what they deserve based on their output.

This exercise teaches them many important things -- how to talk about money, for one. It also starts to teach them negotiating skills, and it introduces the concept of work for pay. Please don't make this a somber, "tough" experience, though -- again, money shouldn't be the bad guy here. This can be fun for everyone.

4. No piggybank raiding allowed.

Every kid's piggybank is where their lessons with money begin. They love their piggybank and they love the money that's in it.

So what do you do? The pizza guy comes to the door and you don't have enough money, so without asking you go right to your son's piggybank to get the money you need and tell him you'll pay him back. Then what typically happens is you forget to pay it back for a week or two, or possibly forever.

You may have forgotten, but I can assure you your son hasn't -- it broke his heart. So keep your hands out of your kids' piggybanks. You need to plan ahead and never catch yourself running short on funds, because if you don't, what sort of lesson is that?