3 Steps I'm Taking to Teach My Kids Smart Financial Habits

It's a big priority for me.

There's a reason so many consumers routinely mishandle their money or wind up with costly credit card debt -- they were never given a proper personal finance education. Many states do not require schools to educate children on financial matters -- though some are trying to change that.

Indiana, for example, just proposed a bill that would require schools to offer courses on topics like opening a bank account, filing taxes, and applying for loans. And there are other states that have introduced similar legislation in an attempt to incorporate financial education into the classroom.

But it's also important for parents to take financial education matters into their own hands. That's something I'm already doing with my kids, even though they're only in elementary school. Here are three specific things I'm teaching my children in the hopes that these lessons carry through to adulthood.

1. It's a good thing to save money

My children are too young to get actual jobs. But they occasionally get money for birthdays, holidays, or from their generous mom -- er, the tooth fairy. One thing I refuse to let them do is keep physical cash on hand, stuffed away in a random corner of their bedrooms. Instead, my kids all have savings accounts, and they're required to put their money into the bank until they're ready to use it.

Meanwhile, I try to emphasize the importance of keeping money in savings and letting it grow rather than blowing money on silly things like stickers and scented pencils. My kids now understand that if they don't take out $3 here or $5 there, they'll be able to save for something big.

Recently, one of my daughters told me she wants to save her money so she can pay for a small vacation for all of us. That may be a lofty goal given her age, but I'm glad she recognizes that skipping small purchases could make a large one possible.

2. It's important to budget

My family follows a budget, and it's something I've shared with my oldest child already so he can understand more about what our finances look like. The reason I shared my budget is for him to recognize that when he asks for something like sushi for dinner, it means spending 20% of that week's grocery budget, instead of cooking a regular meal at home and spending a lot less.

At the same time, I do want my kids to understand that it's okay to splurge here and there. But the numbers have to work out.

3. It's essential to compare prices

My kids can be picky when it comes to food, so they'll sometimes comment on the fact that a given brand of cereal we have on hand isn't one they recognize. That's why I make a point to show them different brands at the supermarket when they're there with me. It's important they understand that you might be able to snag the same item for $2 cheaper depending on which brand is on sale at any given time.

In an ideal world, financial education would be part of every school district's curriculum. But until that happens, it's important for parents to impart that knowledge onto their kids. By teaching these habits at a young age, I'm hoping my children will be able to avoid some of the financial blunders so many grown-ups fall victim to.