The following guest post was contributed by Christine Howell who frequently writes about Accredited Online Degrees and college related topics for Online College Guru, an online college directory and comparison website.

Even before you get married and start a family, it’s not too early to start a savings plan and stick to it. For those who already have a family, it’s essential to get them involved in your savings plan and invested, so to speak, in the financial process. Financial literacy is a hot topic of late, and for good reason; a clear understanding of how finances work is an essential life skill and provides a sound basis for future financial decisions.

One good first step toward involving your family in your savings plan is to enlist them in working toward a manageable short-term goal. Start small; a video game system, a trip to a local amusement park, or a weekend trip to a nearby tourist attraction can be suitable incentives for saving. It’s essential that the goal be something everyone in the family can look forward to and enjoy.

Once you’ve established the goal, it’s time to discuss ways of cutting back on spending in order to save money for the desired reward. Eating in rather than dining at an expensive restaurant, delaying purchase of a new t-shirt or a video game, and cutting back on costly snacks and extras may seem like small steps, but taken in aggregate these expenditures can mount up. By eliminating just a few of the luxuries you and your family take for granted, you can realize enough savings to achieve your goal quickly. As soon as you’ve saved enough money, carry through with your plan. Enjoying the reward is an essential part of teaching your family the value of saving for a goal.

Assign your children specific jobs and pay them for performing them rather than simply giving them an allowance or, worse yet, handing out money when they ask for it. Requiring your children to earn their money will create a twofold benefit; first, it will instill a work ethic that will serve them well in later life, and second, they will better understand the value of money as related to work. Encouraging children to save toward items they want can be an effective method of teaching the value of savings and promoting a lifelong habit of financial responsibility.

Another method for inspiring your family to participate in your savings plan is to initiate a profit-sharing plan. Large companies use this method with good results; the same incentives will work in your own home. By sharing a small portion of the savings realized through cutting back on luxuries and practicing financial responsibility, you can motivate your family to participate in the savings plan and create a fiscally sensible environment.

Finally, eliminate the secrecy that many families practice regarding income and financial decisions. Parents should make it clear that household finances are not to be discussed outside the family, but within the home, financial decisions should be arrived at openly and with input from all members of the family. By demonstrating good financial decisions, you can instill younger family members with an understanding of the elements of finance. This can plant the seeds for financial responsibility and prudent decision making that will reap benefits for their entire lives.

This guest article was contributed by Christine Howell who frequently writes about online degrees and college related topics for Online College Guru, a directory of accredited online colleges.

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  1. Amazon Coupons // November 10, 2009 at 9:10 AM  

    i agree that finances work is an essential life skill and provides a sound basis for future financial decisions.