Recession proof kids

I remember the exact day my seven-year-old learned about sales tax. She wanted to spend part of her allowance and realized when she got to the checkout aisle that things cost more than the price tag. We had a brief conversation about it and she said to me, "Mommy, it sounds like you need to pay me sales tax on my allowance!" I thought, smart girl... but that's not how it works.

I've been trying hard to teach my children about how to handle money for what seems like a long time now. Call it a mom's mission to make her kids recession proof! One of my biggest fears is that when they grow up they will put their future at risk by living way beyond their means.

Early on, we established a weekly allowance for them. For now, they get an amount equal to half of their age. For example, my seven-year-old gets $3.50 -- you get the picture. In exchange, the girls must help out around the house. Larger dollar amounts, say a birthday gift from grandma, goes into their savings accounts.

While we do our best to encourage them to save, save, save, it seems like they just want to spend, spend, spend... especially their allowance. We try to steer them toward making responsible purchases such as a book over a toy. We really discourage them when they want stuffed animal number 598 or yet another package of costly Silly Bandz.

I'd love to know what other parents do to encourage good money habits. Allowance? Savings? Piggy banks? Investments? And what about giving? I'm sure most parents would agree, it takes constant work to teach children financial skills, but the payoff is worth more than dollars and cents.