Unless Americans develop a new personal money paradigm soon, we’re going to continue to spawn generations of adults who value ‘piddlycrap’ over financial security. (Piddlycrap, by the way, is that stuff you buy that either goes down in value or has no value once you purchase it...coffee ring a bell?)

Are you concerned about your kids moving back home after college because they’re in debt up to their eyeballs and can’t afford a place of their own? Well, you should be! There’s talk on the street that more kids leave college these days for financial reasons than academic reasons. And the ones that do graduate often do so with large amount of credit card debt and school loans hanging over their heads as they head off in their new careers. Luckily, this situation is completely preventable. Studies show that it only takes ten hours of personal money management instruction to influence a child’s future money habits; and it is all about habits.

If you’re like most parents, you want your kids to grow up financially savvy.  You try to teach them the value of a buck but all you get is rolled eyes and “yeah, whatever”? You may have even tried the allowance route, the ‘you’ve got to save 10% of your money’ route or even the ‘earn the money yourself if you want that” route but none of it seems to sink in. Rarely do these methods of imparting financial smarts to kids produce adults who are able to make wise decisions in regard to making, managing and investing their money.

But if you’re tired of feeling like your teenager’s ATM machine and the constant nagging when it comes to teaching your kids how money works is getting you nowhere, read on. I can’t promise you it’s going to be easy -- and you’re going to have to do your part of course -- but if you really want your kids to succeed and you’re willing to do what it takes, I can show you some simple steps that will go a long way toward helping you prepare your kids for a fiscally responsible and financially free adulthood. At least that way when his inner child comes out to play, he’ll have a little money to play with.

Albert Einstein once said, “Setting an example is not the main means of influencing another, it is the only means.” If statistics play true, when it comes to spending, saving and investing money, the majority of parents in America are setting a terrible example for their kids. For the first time in history, American’s in 2005 were said to be saving in the negative; that means we are spending more than we are saving. And anyone who can add two and two knows that’s not the way to create a sound financial future.

There’s plenty of statistics that back up the poor example adults are setting for their kids:

But it’s not just the parents who are setting the poor example. (And this is where it’s going to get tough if you want to make a difference.) Subconsciously parents have had an example set for them as well and I’m talking about the example our state and federal governments set for us. Let me explain...just in case you’ve furrowed your brow with disbelief and haven’t figured out where I’m going with this yet.

First, let’s look at the situation hypothetically, if we can all agree that Einstein may have had a brain or two. As of March 8, 2006, the federal national debt was over eight trillion dollars. The estimated population of the United States is a little over 3 billion dollars, so each citizen's share of this debt is close to $28,000. The National Debt has continued to increase an average of $2.17 billion per day since September 30, 2005 but that’s just part of the story.

Let’s look at another statistic. Consumer debt is also at an all time high, but it wasn’t always this way. Back before credit cards became ‘the way’ to buy things (as opposed to pay for) the majority of us used this stuff called cash (and the checks that represented the cash in the bank). When parents used these forms of payments, it was more difficult to get into financial trouble, except perhaps when they would borrow money from a local bank for their business or borrow money from a friend or relative for some reason. People either made enough money to live on, or they ran out of money and had to earn more or cut down on their expenses. If they had a loan out on their house, car or business, they ran the risk of losing the thing that secured that loan. This is the example that was set for kids that were born prior to 1950.

You see, back in the fifties, came the credit card and things began to change. In 1950 both Diners Club and American Express introduced the first real ‘plastic money’ and they did so because having a credit card created a type of elitism by the folks that had a lot of money. It made them feel special but little did they know what was to come. Because human beings seem to be such herd animals by nature, what the rich had became highly desirable by those who wanted to be rich, or at the very least, look rich. Yet in his highly popular book, The Millionaire Next Door, Mr. Thomas Stanley shows you that the truly rich do not necessarily do the things and have the things that the majority of society thinks they do and have.

Now let’s look at how consumer debt has grown since 1950. (Insert statistics here). Since the major portion of consumer debt is credit card related, we’re not going to talk about how mortgages fit into the whole picture (that’s a whole other article). Let’s fast forward to state and federal governments and examine the development, and societal acceptance of, our current common state and federal debt.

Back before ___________________________, our government officials were much better at the ‘B’ word (budget) and living within their means, until...and this is where the correlation between federal debt, consumer debt and our current financial situation intersect.

Before we move on to a simple conclusion, and some simple solutions, you have to understand that most people are motivated by one of two things: pain or pleasure. For the most part, Americans don’t experience much actual pain because of our federal debt. We still have roads and schools and social security and all the rest. Sure we complain daily about these things in one fashion or another, and there’s clearly more bureaucracy(?) now than ever before (meaning there’s more people in government than we actually need to run it efficiently but because it’s actually providing jobs for people, we’ve somehow learned to ignore this impact on our lives in terms of taxes and inefficiency). For the most part, however, our lives haven’t been negatively impacted enough for us to demand, as a nation, a change in how things are done at a government level. So it’s just an observation, but since federal debt doesn’t equal pain, we don’t look at it and think to ourselves, ‘Wow, that’s painful, I don’t think I’ll run my life that way.” Instead, we subconsciously realize that being in debt up to our eyeballs is an acceptable way of living our lives so we follow suit, i.e., follow that biggest example that’s ever been set for us.

Our kids, in turn watch us use credit cards on a regular basis, watch mainstream TV and want, want, want but don’t get the whole picture. They often aren’t privy to their parent’s debt, the stress that comes from trying to keep up with the Jones’ (even though the Jones’ are also in debt up to their eyeballs), how much money their parents haven’t saved, etc. And the main reason for this is that parents say they would rather talk to their kids about sex and drugs than about money. This means that kids often move out after high school and are faced with a world full of money but no idea how to use it. After all, dollar bills rarely come with instructions!

So, what can you do about all this? Are you willing to do what it takes to change an entire country’s paradigm around money? If you are, keep reading. If you’re not, please just go shopping and continue being part of the problem and yes, I’m not being very nice but it’s going to take more than nice to turn this debt ridden, financially irresponsible society around!

Here’s what we have to do, if you have the stomach for it: