Spend, save, share
By Aaron Broverman • Bankrate.com

Every parent gets there at some point. You're standing in line at the grocery store when a chorus of "I want!" snaps you from your thoughts. For Ottawa's Brent Dobson, it was a signal he had to start teaching his children about money, but where to begin? Parents of his generation didn't talk about money, and he knew that an hour-long lecture on financial planning wasn't going to work with a 4-year-old.

Dobson was right to worry -- according to recent research, schools don't teach kids enough about money management today, and it's frequently parents' spending habits that send their children down the road to financial ruin.

So, what are parents who want to break the cycle and teach their kids good money management habits supposed to do? Dobson found his answer while surfing the web one night.

Landing on the Moonjar
It's called the Moonjar: "moon" to encourage kids to shoot for the moon when reaching their dreams and "jar" as a reference to the tradition of writing down wishes and putting them in a jar. Launched in 2001, Moonjars are moneyboxes divided into three removable, colour-coded pieces: green for spending, blue for saving and red for sharing.

They're the brainchild of Seattle's Eulalie M. Scandiuzzi, who remembered that John D. Rockefeller had three jars for his children's allowance in his kitchen -- one for spending, one for saving and one for charitable giving. She combined that with her own family's financial management principles to create the product.

"It's very visual -- kids will easily understand it, and parents don't have to say much before their kids will start asking questions and the parents can initiate the money conversation," says Dobson, who was so impressed by Moonjar's teaching potential he decided to represent the product in Canada.

The spending section is meant to teach kids to spend within their means and defer purchases when they don't have enough. The saving section isn't just for saving for a rainy day -- it’s meant to help kids visualize what they're actually saving for. "For children, a financial plan is too abstract, so we encourage them to draw pictures of what they want and put them on or inside the Moonjar as a reminder of what their goals are," says Dobson.

The sharing side is meant to teach them the importance of belonging to a bigger community and remind them that's another place their money can go.

Of course, kids can't learn to allocate their money if they don't have money of their own, so Dobson recommends using an allowance as a catalyst for a regular money discussion.

Allowing an allowance
In parenting circles, the debate about whether to give kids an allowance gets about as much play as breastfeeding vs. bottle-feeding. But for all those parents who don't want to pay their kids for helping with household chores as a contributing member of the family, Dobson has another way of looking at it.

"An allowance isn't a salary or an entitlement, it's really a tool to help them learn about money. If we start the allowance process and use tools like the Moonjar, then it makes it easier to have conversations about money. You don't have to say 'no' anymore. You can start referring to their Moonjar and they can see if they have enough money to get what they want."

If you decide to give an allowance --  and it doesn't have to be big -- it's important to reinforce what your kids' goals are. To help them, Dobson suggests letting them in on your own financial planning. "Let them know that they're in control of their money, just as much as you're in control of your money. If we raise kids that are in control of their money, then we hope we will never raise victims of money."

It's important not to be too critical about what kids choose to spend their money on. "We'd much prefer our children make bad choices when they're six, seven or eight then when they're 15, 16, 21 or 22. Those are a lot harder to learn from," says Dobson.

But what happens if you're dealing with an older child? Moonjar works for younger kids, but what's available for high school students preparing to leave home and live on their own?

Getting schooled
Parents of teens can breathe easy knowing there is a money management program for high school seniors. Managed by the Canadian Bankers Association, the YourMoney program was created in 1999 to fill the education gap for teens that get to high school and often have no basic money management skills. It's an 80-minute, in-class seminar given by one of a network of over 1,000 volunteer bankers in communities across Canada.

One of them is Heinz Kleist, a retired Canadian Western Bank branch manger from Edmonton with over 40 years' experience. He has been giving the YourMoney seminar for nine years and has found that despite all he teaches about student loans, compound interest, credit, investing and fraud, many teens need the same basic lessons as their younger counterparts. "They are very naive. Most of them have no idea that when they pull out that debit card or credit card, at the end of the month they'll be getting all of these bills."

Before the recession, and even now in Alberta, Kleist observes that his students live like money is no object. "If my students walk away from my class with anything, I want them to know how to balance a budget and measure needs against wants."

If they do overextend themselves, Kleist says it's important teens know the bank is their friend, as long as they follow two simple guidelines. "Even half a payment is better than no payment, and I'm always telling them to make sure they call the bank to explain the situation before the bank starts calling them. Always keep communication lines open."

Aaron Broverman is a writer living in Toronto.