Your kids and the money basics - Your Money

Children learn best about money by example, but it doesn't hurt to to help them interpret what they see you do. This is particularly important during the gift-giving holiday season.

Neale T. Godfrey, founder of the Children's Financial Network in Chester, New Jersey, an organization that educates kids and parents about financial and life skills, says you can begin to discuss the ABCs of making, managing, saving and spending money as early as preschool. She says that as soon as a child understands that you make purchases with money when you go to the store, he or she is ready to learn the basics, Godfrey suggests taking these steps:

Set up an allowance for your kids. An allowance--no matter how small gives kids income so they can learn about money management. "It shows the relationship between work [chores] and pay [allowance]," Godfrey explains. One rule of thumb for figuring the amount of your child's allowance is $1 for each year of age. For example, a 5-year-old gets $5, and you can decide whether this allowance will be weekly or monthly, depending on your budget and the youngster's needs.

Show your child how to set up a simple budget. For children as young as 3, Godfrey recommends this simple technique to help them allocate their allowance and gifts: Collect four jars and mark each one--"charity" (for church and other small donations); "quick cash" (for lunch money, bus fare snacks or other daily "I need, I want" purchases); "medium-term savings" (for more costly purchases like designer sneakers); and "long term savings" (for college or other educational plans). Encourage your child always to put at least 10 percent of her funds into the chanty jar and divide the remaining 90 percent among the other three.

Make money matters part of your everyday family routine. Anytime money is earned, spent, donated, shared, saved or borrowed, you have a chance to teach your child how to make good decisions about it. At the grocery store, for example, have him make note of what's on sale, or how much is saved if you buy generic products rather than brand names. At the gas station, talk about the difference in the cost between full-service and self-service. When you pay for something by credit card, explain that credit is another form of money, not a magic piece of plastic that gives you things. Most of all, be consistent with your money messages and show kids the habits you want them to learn. Regardless of your income, you're the one who can give your little one sound values about money.

Why Every Adult Needs a Last Will and Testament

Half of U.S. adults don't have have a will, says Edward Tanenbaum, a tax partner in the New York City office of the Atlanta law firm Alston & Bird, LLP. Single people often mistakenly think they don't need a will. But if you're unmarried and want someone besides your parents or siblings to inherit your estate--a friend, a partner, a favorite charity--it won't happen unless you spell it out. Tanenbaum says that if you die intestate (without a will), the state will decide who serves as the executor of your estate (the person responsible for distributing your assets). So if you'd prefer to make that choice yourself, you need a will. Moreover, if you're a parent, you'll want to be sure your will names your child's guardian in the event of your death. And you'll need to update your will every time there's a major shift in your household--birth, death, marriage, separation, divorce or change of live-in partner.

The cost for a simple will (no trusts or complex estate planning) is typically only a few hundred dollars; more complicated wills range from $500 to $1,500. In some states you could just fill out a boilerplate (for example, go to the legal publishing site nolo.com) and have it notarized and signed by two witnesses. However, having your will reviewed by a good attorney guards against loopholes in the document that could invalidate the will in your state. Valerie Coleman Morris is an anchorwoman with CNNfn.

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