12/21/2012 01:46 pm ET Updated Feb 20, 2013

Armageddon? Don't Bank On It

The Mayan Calendar comes to a close on December 21, 2012 and some people predict this to be the end of the world. Please don't liquidate your assets, go on a spending binge or max out your credit cards. I'm nearly certain that we're going to wake up on December 22, 2012 to find life unchanged. But, while we may not be facing Armageddon in the next few days, we are facing -- "Moneygeddon."

Nationally, in the aftermath of recession, we have high unemployment, staggering national debt, costly national disasters and the impending threat of the "fiscal cliff." Personally, we have large household debt, student loans, houses mortgaged for more than they are worth, rising property taxes and possibly higher income taxes. It is more important than ever to teach your kids about money and financial responsibility.

Although unemployment has improved, it is still hovering just below 8 percent. For the government, this represents a loss in revenue and increased expenses for social subsidies. In human terms, higher unemployment means more families in crisis.

Simply put, the national debt is the amount of money the nation owes, and it is currently around $16 trillion. This translates to approximately $52 thousand in debt for every citizen.

Natural disasters are costly. Superstorm Sandy is expected to slam the economy by a record-breaking $60 billion. Entire communities have been left homeless. Businesses were destroyed -- meaning more people without jobs. The ripple effects will eventually lead to higher property taxes and utility costs.

The "fiscal cliff" is the hot topic of every news source -- but, what does it mean? "Fiscal cliff" is the shorthand term used to describe the implementation of the Budget Control Act of 2011 at the end of this year. Unless lawmakers come together to pass intervening laws, taxes will go up and social benefits will go down. Both will result in more financial burden on the average family.

Take a look at U.S. household consumer debt:

  • Average credit card debt: 15,418
  • Average mortgage debt: 149,782
  • Average student loan debt: 34,703

Let's also add in an auto loan and insurance, health insurance, income and property taxes, utilities and rising food prices. At best, families are struggling. Job loss or an unexpected major expense would be crippling.

It's easy to see why there were 1,362,847 personal bankruptcies filed in the U.S. last year.

These circumstances and numbers are far more frightening than the possibility that a lost civilization predicted the end of the world on a precise date -- hundreds of years in their future. Talk to your kids about money and give them the tools to avoid their own "Moneygeddon."

As early as possible, teach your kids about money. Be sure they understand that the only way to get money is to earn it -- use their allowance -- teach them to budget and the importance of living within one's means. Budget is money in versus money out. Governments, businesses and individuals require money to operate. If "Money Out" exceeds "Money In," there are eventual consequences. Governments can print more money and raise taxes -- although it would be nice, people don't have those options. Individuals must live within budget constraints. Remember that actions speak louder than words and that your children will learn by your example. A great way to begin is to have your kids help compile the grocery list and then make sure that only the items on the list go into the grocery cart.

This has been a lot of discussion of doom and gloom, but the lesson is that while some disasters cannot be avoided we can give our kids the proper tools so that they can have a strong financial future. I'd like to hear how you are discussing the fiscal cliff and "Moneygeddon" with your families or how you are cleaning up your financial lives.