“Here’s my credit card, sweetie. Take it to Toys “R” Us and go crazy!”

Ridiculous! No sane parent would do such a thing … right? But consider that in just a few years your little darling will be getting credit cards in the mail and — if she isn’t given any guidance — can rack up debt before she’s even stepped foot into college.

Although learning about money management — from dealing with debt to managing a mortgage — is a critical life skill, finances are seldom part of the school curriculum. Given that 80 percent of Americans are insolvent and the average household owes about $16,000 on their credit card bills, it appears that few kids are learning about financial responsibility at home, either.

Whether your child is 5 or 15, now’s the time to transform your future debtor into a financial whiz kid — with very little effort. Here’s how to get started.

  1. Be real about money

    Instead of hiding from your children your personal finances, use them to teach everything from how credit cards work to how much life — groceries, rent or mortgage, gas, etc. — costs you every month. If you’re currently carrying a credit card debt, show your kids (elementary aged or older) your statements and explain what the family charges and how much interest you might be incurring. (This exercise might also help you be more money conscious.)

    Explain how you’re saving for retirement or their college education fund through a 529 college savings plan. Depending on how old your children are, you can also show them what kind of return you’re earning and explain how these accounts carry tax advantages. (Quick tip: when talking about finances, physically get on your child’s level. Yes, you may need to sit on the floor, but this helps kids take in the complexities of money management.)

  2. Embrace the pocketbook-saving power of “No”

    We want our kids to be happy, but the road to happiness isn’t taken by buying, on a whim, a pleading, doe-eyed child every $3 cake pop and $60 Furby that crosses their path. If your child begs for something you can’t really afford (but that can easily be acquired with a swipe of the credit card), master the money-saving art of saying, “No”. Explain, without guilt or admonishments, the reasons why you can’t afford the item. Over time — and with that at-home education you’ve been giving (see #1) about your family’s finances — your children will start understanding that there are financial consequences to spending beyond their means.

  3. Help your young super saver open a savings account

    It’s one of the time-tested ways to teach kids about saving money, even for very young children. By having their own account, they’ll be more invested in depositing (and saving!) money, checking their account balance, and celebrating when the account earns interest.

  4. “Play” money to make it real

    Kids will learn more easily about money management by turning it into a game. Set up a mini-store in your living room or garage with “items” — toys or other knickknacks you gather around your house — priced between one cent and $5. Give your child a set amount of money — including all denominations of coins, plus a few $1 bills and one $5 bill – to spend in the store. You be the cashier and help your children make change, while your kids figure out the worth of different coins and bills, do the adding and subtracting, and manage their limited funds to get what they most desire. Reverse roles and play again, letting your child be the cashier selling things to you.

  5. Give them a salary (a.k.a. allowance)

    If your children aren’t getting paid a small amount to do chores, start. This empowers kids to aspire for the things they want, while teaching them about saving and planning. According to Kids’ Money, the average allowance for a 7-year-old is $4.10 per week. That’s more than $200 over the course of a year. But parents rarely show kids how to allocate the money they get. Teach them about spending, saving, and sharing — and that their finances must be treated with respect.

  6. Teach them the real cost of stuff

    Considering buying that hot new 60″ LED TV? Financial experts recommend figuring out how many hours of work it will take you to buy any object of desire, which in turn might well make you reconsider whether you really need it. Do the same with your child: if he’s enthralled with a new gizmo “all the others kids have,” don’t stop at telling him how much it costs — show him, in actual cash, laying out the amount in dollars and cents. Then equate the cost to how many times your child would need to take out the trash or put the dishes away to earn enough to buy it.