NEW YORK (AP) One of the most important skills parents can teach their children is how to manage money. And, fortunately, life often provides plenty of opportunities to do so.
From giving a kindergartner an allowance to encouraging a teenager to save for a bicycle, parents help a child develop sound spending and savings habits habits that can last a lifetime.
''There's no question but that kids raised in an environment where basic personal finance is discussed are more successful in handling money as adults,'' said Meridee Maynard, a vice president at life insurer Northwestern Mutual in Milwaukee.
''The earlier parents start working with their kids, the better,'' she said.
There's little question but that more needs to be done to educate American children about money.
A recent study by the nonprofit Jump$tart coalition, which sponsors ''financial literacy for youth'' month every April, found that high school seniors could give the correct answers to only half of a series of questions about personal finance and economics.
The Washington, D.C., group lobbies to improve basic financial studies in U.S. schools and also offers educational materials to parents and children at its Web site, www.jumpstart.org.
Northwestern Mutual's Maynard suggests parents consider a child's age when introducing various money concepts.
She said, for example, that children as young as 3 or 4 are ready to get their first piggy banks and coins so they can watch their money grow.
''And parents who shop with young children should try to use cash, not plastic,'' Maynard said. ''They need to learn that four quarters equal a dollar, five nickels equal a quarter, things like that.''
She has these recommendations for older children:
Age 5-6: Start a weekly allowance and urge your child to save some of it. She recommends a dollar a week for each year of a child's age; others suggest 50 cents a week per year.
Age 9-10: Introduce the concept of making a budget.
''If your 10-year-old is getting $10 a week, he needs to start thinking about how far it will go,'' Maynard said. ''Can he afford a CD, some ice cream and a notebook?''
Age 11-12: Allow your children to pick a stock parents can buy them a share or two and show them how to track it in the newspaper or online.
Early to middle teens: Help them open a checking account, with parents as co-signers.
Age 16: Encourage them to get part-time jobs and explain how taxes work.
Ellie Kay, author of ''Money Doesn't Grow on Trees,'' a guide for parents to use in teaching kids about money, believes many life events can be teaching events.
Take a family's trip to a zoo or an amusement park.
''Calculate what you think it should cost, add a bit of a pad, and give them the cash to manage,'' Kay said. ''They'll learn to live with a budget and generally will figure out how not to spend everything too quickly.''
Kay, the mother of seven children, also advocates giving a child an allowance, but not in exchange for work.
''I believe there are certain chores they have to do because they are part of the family,'' she said.
But she does believe in paying her children for jobs she could hire out, like baby-sitting, mowing the lawn or shoveling the sidewalk.
Kay said that to encourage savings, she has helped her children set up two accounts one at a bank for long-term savings that ''they basically never get to touch'' and another at home for things they want to buy.
''If you look around you can generally find a bank with special kid accounts,'' Kay said. ''My son especially liked one where every time he deposited $5, he got a free dinosaur.''
For short-term savings goals, such as the purchase of inline skates or video games, Kay recommends parents match their children's savings dollar for dollar. That gives them an incentive to save, but still makes it their purchase.
''If you think about it, almost every day there can be teachable moments,'' Kay said.
On the Net:
Northwestern Mutual's financial literacy site: www.themint.org
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