smart spending

Ten Commandments of personal finance

VIII. Thou shalt teach your children to handle money wisely

Sweeney and Sebold strongly recommend this commandment.

"However," Sweeney says "if you're not handling money wisely, it's hard to teach your children to do so. You have to set a good example."

Sebold recommends having children as young as 8 keep a log of where their money is being spent. For example, if you give your child a $10-a-week allowance, at the end of the week he or she should be able to tell you how the money was spent or if any of it was saved.

"When you read about the history of very wealthy families like the Rockefellers of the world, they were all given accounting sheets when they were kids," he says.

Sebold also points out that each child should have a bank account so you can teach them about bank statements. As an added incentive to get your children to save, "Tell them they have to pay for college. It will change their focus on what money is all about."

IX. Thou shalt plan for retirement

Retirement may be so far on the horizon, it's barely a speck. Or it could be so close that you figure there's no point in even starting now.

It doesn't matter if you fit one of those categories or somewhere in between. Unless living in a cardboard box is your idea of a little bit of heaven, you absolutely have to plan for retirement.

And not just for yourself. Although children are not legally responsible for paying for elderly parents when the parents can't pay for themselves, many adult children feel emotionally responsible.

It is important to not only save for your retirement -- hopefully starting at a young age -- but to help guide older parents who may not be as financially knowledgeable in planning for their retirement.

X. Thou shalt legally protect thyself and thy family

Whether you're single or married, you should have a will or trust. Actually, these documents are not for your benefit but for the benefit of your heirs. If you don't have a will or trust, it becomes a legal nightmare for them.

Sebold and Sweeney emphasize that it's also important to have a living will and health care power of attorney. You should have written instructions regarding what happens at the end of your life.

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