10 tips to raising money-savvy teens

Even if you're planning to cover most of the costs so that they can focus on school, not work, break down all of the expenses, from how much the family's insurance premium increases when they're added as a driver to the cost of new tires. And make them responsible for paying a portion of the expenses, especially gas.

"It's a great budgeting tool," says Bodnar, whose son, a freshman in college, has bought his own gas since high school. "It's an incentive for him to get his summer job, and it's an incentive to hold down the cost as much as he can." Though kids who rely on the family gas card don't blink twice when it costs $80 to fill up the tank, Bodnar's son is keenly aware of the price of a gallon, and he buys his gas from a station that offers a discount for paying with cash.

9. Save for the future 

While teens see the value in saving for a car, few have the ability to see 30 years down the road. Although 80 percent of college students surveyed have savings accounts, most admit that they lack adequate savings, with 60 percent saying they have slightly less or much less set aside than they should at this phase in life and a mere 7 percent having any form of retirement account.

To motivate them to save for the future, use a compound interest calculator to show them the "miracle of compounding," says Neale Godfrey, author of "Money Doesn't Grow on Trees."

"The miracle works to your detriment with debt, but in your favor if you're saving money."

Once they start working, have your teens open Roth IRA accounts. As an added incentive, Howard matches his daughter's contributions dollar for dollar. To add even more diversity to the portfolio, Godfrey advises young adults to buy and hold stock in the companies that make the products they use every day.

10. Stretch a dollar 

Even young children can learn the value of a dollar.

"Don't make money the biggest secret in the household," Godfrey says. "Get them engaged in the process."

Give young kids an allowance and make them responsible for some of their expenses so that they learn how to set priorities and manage their money. Interactive Web sites such as specialize in teaching youngsters the value of money in a fun way. Teens with part-time jobs should pitch in, too, saving money for college or their senior year expenses, such as their prom outfit and their class ring.

When it's time for back-to-school shopping, set a realistic budget and involve them in the buying process. Teach them how to shop the sales and find deals on trendy clothes at consignment shops, such as Plato's Closet. If they come in under budget, let them keep 100 percent of the difference.

"Kids will spend unlimited amounts of money as long as it is yours," Bodnar says, "but when their money is on the line, it is a whole new ballgame."


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