As a 37-year-old single mother, Yvette Saul knows that the key to her financial empowerment starts with her ability to create and maintain a savings initiative and to adequately manage her family's finances. And while she didn't learn this as a child, she is determined to make sure that her 11-year-old daughter, Savannah Gay, learns the concept of proper money management. By educating her daughter at an early age, Saul is ensuring that little Savannah is more inclined to practice sound budgeting as she gets older. In doing so, Saul is adopting Declaration of Financial Empowerment principle No. 7: to provide access to programs that will educate my children about business and finance. "It's extremely important for me to teach her about money and financial planning," says Saul. "Although money is not the root of happiness, it certainly is the pathway to happiness by being fiscally responsible as an adult." In a turbulent economic environment, and with the uncertain future of Social Security, it's even more important that parents pass on the basics of personal finance. The learning process should start when you're a child. Parents have to teach children the value of money and guide them in their spending, encourage them to save, explore entrepreneurship opportunities, and expose them to solid financial planning. By using a few of the principles found in our Black Wealth Initiative, we offer you a step-by-step guide to help start your children down the right path. Open a savings account and show children how to save. Since the age of 5, when Savannah opened her first savings account with $100, she has been on a path toward saving and money management. And while she is tucking away 40% of her $20 weekly allowance into a savings account, Savannah is following DOFE principle No. 2: to save and invest 10% to 15% of my after-tax income. Savannah has spent some of the money while on family vacations and on other personal items. She currently has about $700 in her account. According to New York City-based financial consultant, Ivanhoe Ffriend, of Ffriend Enterprises, parents cannot underscore enough the importance of exposing their children to the sacrifices that go into planning the family budget. The value of money can be taught early on by teaching children how to bargain shop or collect coupons. Teach children to respect the value of money. A child's attitude toward money will determine how he or she uses it in life, according to Laura Levine, executive director of Jumpstart Coalition, a Washington, D.C.-based national organization that develops standards to teach kids about finance in grades K—12. "A lot of times it's a value decision, but we encourage parents to include a lesson at home that teaches their children about the value of money." Inspire children to budget. Getting children to track their own spending is a great way to start and follow DOFE principle No. 4: to engage in sound budget, credit, and tax management practices. Parents might have to give children an incentive to keep track of their expenses such as a financial reward or a day off from chores. Showing them the importance of budgeting for items they need versus spending extravagantly is critical. "Children must realize that there is an inflow and an outflow of money and you don't want the outflow to be greater than the inflow or else we become financially over extended," says Gwendolyn Kirkland, a certified financial planner at Kirkland, Turnbo & Associates, in Chicago. "A budget establishes financial boundaries. So when they're asking for different things, parents can say they either budgeted or they didn't budget for it." Encourage children under the age of 8 to divide money into different categories. Perhaps they should have one piggy bank for saving and another piggy bank for spending. By the time your child turns 9, talk to him or her about creating a small budget to keep track of income and expenses. Teenagers, should already understand the basics of personal finance and budgeting and be allowed to make their own financial decisions, with your guidance. By then, budgets should be a cornerstone of their money management. Plant the seeds of entrepreneurship. Not all children receive weekly allowances. When Angelina and Marvin Lipford, of Hampton, Virginia, were married 20 years ago, they entered into their marriage carting around $15,000 to $20,000 worth of credit card and student loan debt. They spent the first five years of their marriage paying off the debt along with the accompanying high interest rates. The couple was determined to keep their three children from falling into the same trap. Knowing the financial sacrifices they had to make early in their marriage, the Lipfords are making sure their three children keep a tight rein on their finances and avoid the same pitfalls. They have an 18-year-old daughter, Jasmine, who is attending Howard University on a basketball scholarship; a 15-year-old son, Marvin Jr., who is a sophomore in high school; and a 9-year-old, Nehemiah. A natural progression in teaching their children the building blocks of finances was to encourage their children to either work, as Jasmine had done before going to college, or to start their own business. Instead of giving their children allowances, the Lipfords encourage them to earn their own money by doing chores around the house. It was on a pay-per-work arrangement. And if the children asked their parents for additional money, they were required to pay their parents back with interest. This arrangement encouraged Marvin Jr. to earn money on his own. In 2002, he took the financial and entrepreneurial lessons he learned from attending a weeklong financial camp to cut grass during the summer months using his father's lawn mower. This past summer, he charged $20 a yard and earned $1,000, which he put into his savings account. Show children how to pay bills. With so many people paying bills online, this is an opportunity to get children involved. Show them how money is deposited into an account, and how you're subtracting from those dollars to pay your obligations for gas, the lights, and food. Saul discusses her finances with her daughter because it gives her a better sense of household expenses. When Saul receives her paycheck, she sits down with Savannah on a monthly basis and explains her income and the expenses she has to meet. "I would sit down with Savannah every month when I pay my bills and she would pull out her calculator and start adding things up. It becomes like a game to her but her thought process is moving." According to Kirkland, this is good for children to see. "This makes it real to the children -- the specific dollars you have left in your account," says Kirkland. "This instills an appreciation for what it takes to run a household." Savannah sees exactly where her mother's money is going. Expose your children to investing. Many people can go online to monitor their 401(k) account, change the contribution they make, and their asset allocation. This is an excellent time to introduce children to this concept. Kirkland suggests getting children to invest early and to invest in what they know or what they use. As an example of practicing DOFE principle No. 6: to be proactive and knowledgeable about investing, money management, and consumer issues, Kirkland suggests giving stock as a gift to children when they turn 12. "If it's something that they wear, they want, they eat, something that they can relate to, buying stock in that company introduces them to the concept of ownership. You own a part of this company." While parents will have to open a custodial account for children under 18, the process of doing it together exposes young people to investing. Ffriend suggests introducing children to other tax-deferred investment vehicles, such as a 529 Plan. "While control of the 529 Plan rests with the parents, the benefit is that it is tax-deferred," he explains. "One of the things a child will learn early on is that wherever it is legitimate, they should defer taxes as much as possible, so they can have more income in the future." Hold family financial meetings. On a regular basis, parents should hold meetings where family finances are discussed. Go over spending habits with your children. Examine how they track their spending and what they spend money on. Let the kids explain why they are making certain purchases, and make the total family finances a discussion with input from everyone. Use the same principles, standards, and parliamentary procedures that a board of directors in any multimillion-dollar corporation might use. This is the meeting where you, as a family, map out long-term and short-term financial goals and develop strategies to accomplish those goals. This is also a good time to invite a professional financial planner to attend and let him or her offer individual professional help. These are but a few of the tips to teach your children about money management. There are other everyday practices you can do, from reading the business or money section of the local newspaper with your children, to watching television programs that follow the market and our national economy. Have discussions about what's in the financial news. It's important to do something that puts your children on the correct path to good money management. And as always, follow the coverage of our Black Wealth Initiative. For a Wealth Building Kit or to open a ShareBuilder Custodial Account for your child (an online brokerage account), visit blackenterprise.com. A resource guide to help you teach your children about money management Here at BLACK ENTERPRISE, we encourage our readers to introduce the children in their lives (including nieces, nephews, and grandchildren) the fundamental principles of money management. We know that building wealth and teaching solid money-management skills to our children is a continuous process. Therefore, the following resources are designed to help parents teach today's children the basics of financial empowerment. Websites blackenterprise.com. BLACK ENTERPRISE magazine seeks out, analyzes, and disseminates information that is helpful to, and provides a forum for, the ideas, ambitions, and expression of African American business people. www.myownbizkit.com This Website offers business opportunities to parents and their children who are highly motivated and interested in learning about entrepreneurship. www.youthventure.org This Website helps young people across the country start new youth-led organizations that achieve a lasting benefit for their schools and communities. www.youthinvestor.com This Website offers insightful information that introduces young people to concept of investing. www.fleetkids.com This Website contains a wealth of knowledge to help parents teach their children about money and investing. www.bankingonourfuture.org Helping children take control of their financial future, this Website offer the basics in banking and credit unions, checking and savings accounts, insurance, credit, and investments. www.jumpstartcoalition.org This site's direct objective is to encourage curriculum enrichment to ensure that basic personal financial management skills are attained during grades K—12. www.ncee.net/ea/program.php This organization provides materials and programs to help schools across the country meet state academic standards in economics, personal finance, and social studies. www.teachingkidsbusiness.com This is a free online resource that helps kids in grades K—12 discover, explore, and gain experience in the world of business. www.ja.org Junior Achievement uses hands-on experiences to help young people understand the economics of life. Organizations NAACP Reginald F. Lewis Youth Entrepreneurial Institute; 410-580-5745; www.naacp.org National Association of Investment Corp. (Trade group for investment clubs); 877-275-6242; www.better-invest ing.org/subjects/youth The Institute for Entrepreneurship; 414-302-9922; www.theeplace.org The National Foundation for Teaching Entrepreneurship; 800-367-6383; www.nfte.com Books & Publications Banking on Our Future: A Program for Teaching You and Your Kids About Money by John Bryant & Michael Levin (Beacon Press; $14.00) Raising Financially Fit Kids by Joline Godfrey (Ten Speed Press; $19.95) Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children by Neale S. Godfrey and Carolina Edwards (Simon & Schuster; $12.00) Make More than Your Parents: Your Guide to Financial Freedom by Micke Bundlie, Kevin O'Donnell, Bart DiLiddo (HCI; $12.95) Camps & Programs Black Enterprise Kidpreneurs Conference: 800-543-6786; blackenterprise.com The Bull and Bear Investment Camp (conducted by Moody Reid Financial Advisors Inc.); 800-761-0274 Camp $tart-Up, Summer$tock, and Who's Behind the Noise; 805-965-0457; www.independentmeans.com Securities Industry Foundation for Economic Education Stock Market Game; 212-618-0519; www.smg2000.org YoungBiz Better Investing and YoungBiz 'Trep Camps; 888-543-7929; www.youngbiz.com