How do you teach your children about handling finances? We've all read articles about giving them an allowance and teaching them to budget for things they want. That's good advice, but I've gone one step further. I've actually revealed the family finances to my sons. It not only teaches them how to budget money, but it shows that we don't have a bottomless pit of cash to draw from.

I can understand why people refuse to share the family finances with their children. They may fear that children might worry excessively about it. Or they might be concerned the kids will blab your salary all over the neighborhood.

However, if you are having financial problems, your children will pick up on it. They fill in the details of what they don't know with their imaginations. I remember my father had business problems, and I lost sleep thinking that all of our possessions would be auctioned off. Perhaps if my father had told me where we were financially, I wouldn't have worried so much.

I wouldn't worry too much about the kids divulging salaries either. I can't even remember the exact amount of what I make, and I doubt if my sons can either. Your neighbors probably have a pretty good idea of what you make anyway. One couple I know stubbornly keeps details about their finances a secret from their children. However, they openly argue in front of the children about their sex life (or lack of it). I wonder what their neighbors are more interested in hearing about?

Why should your children take part in the family finances anyway? For the short term, as children approach the pre-teens, they get a permanent case of the "gimmes." For boys, it starts with Nintendo and works its way up. I don't have any daughters, but I'm sure they are just as bad. Children are very conscious of what the Joneses have. Is there any way to slow down the gimmes? Yes, to some extent, if you let them see how their material desires will affect the finances. On the other hand, sometimes it pays to listen to their logic. My son wanted to know why we had to put so much in Dividend Reinvestment Plans and had to drive junky cars. I started to explain it to him, and it didn't make a whole lot of sense. We got rid of the junkers.

The long-term rewards of sharing the family finances are more important. Children learn by observing and practicing. Is it fair to our children to send them off into the world in their twenties and expect them to all of a sudden understand how to budget? Worse yet, go through a college campus some day and look at all the different credit card applications stuck up on the bulletin boards. College students can get a credit card prior to graduation. If they don't understand how to budget, they will soon see a burgeoning debt load with consumer debt on top of their student loans.

As parents, we have to raise our children in a world full of drugs, easy sex, dubious morality, and CNBC. We may worry about our children growing up to become ax murderers, but the chances of that are rather low. A more realistic fear is that they will sponge off of us the rest of their lives. Just as it is important to teach your children that ax murdering is bad, it is almost as important to teach them that budgeting their finances is good. Unlike the lesson about ax murdering, the best way to teach about finances is by doing. Hopefully, when your children grow up, they will responsible and financially stable. If they aren't, at least you can say to yourself that you gave them the tools, but they chose to be different. That's the most one can expect to do as a parent.

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