Here's a link to an article that was published yesterday on Yahoo Finance. It gives 7 ways to avoid raising financially dysfunctional kids.

7 Things You Should Never Say to Your Kids About Money

Here's another blog Dan wrote on this topic.

What are you teaching your children about money?

What are you teaching your children about money?

Never tell children that their parents are wealthy. Kids who grow up thinking their parents are wealthy often learn to live like they are.

Teach your children discipline and frugality. These are values held by most financially successful adults. Yet, kids can’t learn them on their own. Who will teach them if you don’t?

Children shouldn’t realize you are affluent until after they have established a mature, disciplined, and adult lifestyle and profession. It’s better that they learn some things on their own.

Minimize discussions about inheritances or gifts. Parents sometimes forget these talks, but children don’t. Many years later, these seeds can grow into large family conflicts.

Never give gifts to adult children as part of a negotiation strategy. Bribes usually backfire with toddlers – and adults too. No one likes gifts with strings attached.

Stay out of your adult children’s family matters. Adults make their own choices, and you should let them. All children resent interference.

Don’t compete with your children. Adult children sometimes hold different financial values than parents. Money may be less important to them than other things – education, status, happiness. Let them be.

Remember that children are individuals. Don’t try to equalize nature’s inequality with money. It rarely works, and siblings resent it. Respect each child separately.

Emphasize achievements, no matter how small. One parent taught his son, “I’m not impressed by what people own. But I’m impressed with what they achieve.” Guess what? The son achieved a lot, including financial success!

Tell children that there are a lot of things more valuable than money. Most of us know this, but few emphasize it. Yet, it’s one of life’s most important lessons. How can anyone be happy without this knowledge?

I grapple with these issues regularly. All of us learn early financial values from our parents (even by default). Most of my clients learned both good and bad at the “family school.” Sadly, some never overcome bad lessons.

What are you teaching your children about money?

Teaching Kids About Money

By Dan Danford, Family Investment Center
From Table Talk, August 12, 1999

Raising children is a common theme many of us face. As parents, we walk a fine line between giving kids what they want and teaching them important lessons about life.

Every family is different and so is every child. So, things that work with my girls may not work for you. But, I get many questions about money and kids, so these are some thoughts on the subject. Experience has been my main financial teacher, so the ideas aren't sacred and they continue to evolve. (I confess that my school counselor wife influences me. In fact, if you like an idea, if probably came from her. If not, lay the blame at my feet.)

First, kids won't learn good things about money unless we teach them. Default is unacceptable. What financial lessons come from television or other children in our schools or neighborhood? Are these lessons we want our children to learn? We must take positive action to override bad examples seen almost everywhere.

How should we teach the right lessons? Start by setting a good example. Forget what the spoiled athletes say; we are role models. Our children watch carefully and imitate our behavior. If we show prudence and discipline about spending, so will they. If we regularly save and wisely invest, so will they. We are the money gods in their lives, and they look to us as their mentors.

Let them learn through mistakes. A regular allowance is a great tool for this. Let them spend as they want, but patiently coach them in reaching good decisions. When they make bad decisions (and they will), let them suffer the consequences. Don't bail them out if they overspend. Overall, allowance dollars are tiny, but life lessons taught here can be huge.

Teach them to work. Children will not grow into productive adults unless they learn to work. Period. There's a good chance they won't want to work and a strong temptation to let them "enjoy life" as a teen. But, one critically important life lesson is to balance work and play. They won't learn this lesson without working and adulthood may be too late.

Life's focus shouldn't be finance and placing too much priority on money can be bad, too. So, a most important gift for our children is the lesson of perspective: in life, people are most important. Money is simply a tool to help the people we love. Nothing more. Nothing less. If we teach them this, our children will prosper.

Identity theft targets children

If you have children or grandchildren, particularly of a young age, you need to think about guarding their financial information. Increasingly, those who steal Social Security numbers and other identifying information are targeting information from children, since it will likely be years before they ever access a credit report.

GOOD NEWS, though, according to Kiplinger.com's Cameron Huddleston: you CAN protect that information, and their latest article outlines how to do it.

Here's a statistic that will likely shock you - and hopefully prompt you to take some action:

About 400,000 children a year are victims of identity theft... They become victims when criminals get their Social Security numbers from medical records, mail tampering, computer searches or a stolen wallet with the child's card in it.

Click here to read more:

http://www.kiplinger.com/columns/kiptips/archives/protect-your-kids-from-id-theft.html