5 Money Lessons You Definitely Should NOT Teach Your Kids

Want to give your kids one of the best gifts you could ever give them? Teach them how to handle their money. And do NOT teach them the following lessons:

1) Pick a career you love, with no consideration of earning power.
Many parents tell their kids "do something you love and the money will take care of itself." That sounds nice. Everyone deserves to be happy. But can you be happy if you don't find a job? Or get into a career that doesn't give you the life you want? There's no easy answers to those questions, as many people live happy lives doing social service work, missions, or even volunteer work. And this is not to say you should discourage your kids to use their talents as actors, artists, or the like. But you should teach them some kind of balance. And if they decide to go to college, make sure to discuss the benefits of a degree, and who will be paying back the student loans, if there are any. Encourage your kids to do volunteer work, job shadowing, internships, or get a part-time job in the field they want to build their career BEFORE they make any significant investment, so they can see what the working life is really like.

2) Money comes easy, so don't worry about how you'll get it.
When it comes to teaching kids about money, giving an allowance is a debatable topic. Should you give your kids an allowance, either for doing some basic chores or just out of the goodness of your heart, so they have some money they can learn how to manage? Or not? Tough question! Here's one way to think about it - is it better to just give your kids money, or to teach them how to earn it? Just doing the same chores every week for the same amount of money doesn't really do it. Instead, think about giving them the choice - do the work and get paid, or don't do the work and don't get paid. Have them do jobs around the house - real jobs that require some work, like painting or window washing or fixing something that is broken. And teach them that to GET money they have to GIVE some sort of service and effort.

3) Keep all your money in the same place.
When you're a kid having all your money in one account is no big deal. You make a few bucks, put it in your savings account, and take it out when you need it. But as your kids get older, and as they become adults, this becomes a bad strategy. Because in 2011 if you put all your money in your bank checking or savings account, you're earning very little interest. It may be safe, but it isn't doing much for you. Or if you invest it all aggressively into a single stock or type of investment, you risk losing a LOT when the market changes. Even as a kid, if you put your money in your drawer or in a box, you risk big brother or sister taking your money, or your parents "borrowing" from your stash of cash. And none of these are things you want to have happen. So teach your kids to diversify their money early on. Need money quickly? Keep some in your bank savings account. Want to save long term? Put money in U.S. savings bonds, mutual funds, stocks...you get the idea. The more kids know about the different types of investments the better.

4) Hope is a good thing...
Hope you win the lottery. Hope you get a good job. Hope social security will be around when it's your time. Hope that mom and dad will bail you out when things get bad. And if none of these come true, don't worry, something good will happen. Obviously, this is a bad strategy when it comes to managing money, and a bad lesson to teach your kids. Instead, teach them how to set themselves up well financially long-term. Teach them how to save on a regular basis. Teach them how to start their own business or get a job when they need money. Teach them how to protect their money and not to spend all their money just because they have it right now. Then, if you want to buy a lottery ticket for fun, good luck!

5) If you want it, buy it now, worry about paying for it later.
When you're young, ask mom and dad to buy it for you. When you're older, use plastic. Same concept - buy now, pay later. Bad lesson, very bad lesson. Kids need to realize that money is a thing, not an idea. Meaning that you need it to spend it. Credit cards are a way of life for many adults, but for most people they are little more than an illusion. An illusion that you have money that you might not have. OK, if you use credit cards responsibly, or if you use them for the rewards and then pay them off every month, that's not so bad. But if you buy something on a credit card because you don't have enough cash, then what happens next? First, you get a bill for the entire balance. Then, next month there's some interest added on. Before you know it, the monthly payment keeps getting bigger and bigger...do your kids a big favor, and teach them that if you want something then you should wait until you have enough cash to buy it. Otherwise, keep saving until you do.

The best time to teach your kids about money is when they are young enough to want to start spending it. That means they understand that money is a means to getting what they want. Of course, you don't need to force them to read Forbes or the Wall Street Journal when they are 3. But it's never to early to learn the balance between spending, saving, and earning!

About the Guest Author
Kris Bickell started www.Debt-Tips.com to share the lessons he learned about getting out of debt, fixing credit problems, and saving money. Learn how to get the type of debt help you need and get your finances back on the right track.