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If you have children aged six or older, it's time to start teaching them the basics of money and finance ? and the Internet provides a wealth of resources.
You should, of course, put the kids on a regular weekly allowance with modest bonuses for special chores performed, and work out a budget for their spending, saving and investing.
To give them practical knowledge, you also should start discussing family finances with them, to an age-appropriate degree.
"Parents should be open about money with their children," said Charlotte Baechur, editor of Zillions, the Consumer's Union magazine for kids. "If they're going to make a purchase that's visible to the child such as a car or a TV, they should talk about the expense and say things like, ?Well, if we buy this, we can't buy that, or we will have to cut back on that.'"
In the last several years, a number of Web sites have sprung up devoted to helping kids of all ages learn about money and investing. Here's a sampling of some of the better ones:
For children six to nine
www.fleetkids.com ? Sponsored by the Fleet Bank, has great games ? like "Buy lo, Sell hi" and "Chunka Change" ? that teach kids about spending and saving. Kids can compete for prizes such as computers and backpacks for their schools.
For children 10 to 13
www.strongkids.com ? Teaches about investing, earning and saving money. It also explains IRAs, trust funds, and savings accounts for kids under the Uniform Gift to Minors Account. Children can use the "ladder" to chart their savings goals and the "tape measure" to learn about compound interest, and take the "hard hat quiz" to get the basics of mutual funds. The site also has a thorough glossary of financial terms.
www.zillions.org ? The successor to Zillions, once the premiere financial education magazine for children. The magazine, published by Consumer's Union, has folded, but a Web site is under construction and scheduled to be fully operational in September. You can visit an early version of the site and enjoy its new features -- such as a baby-sitting comic strip and a product review of toys -- and write in your comments for what more you'd like to see.
www.savvystudent.com ? Gives lessons in saving and spending money for entertainment, food, travel and clothes. Kids can subscribe to a free monthly E-newsletter and use the "Dear Savvy Student" center to submit financial questions online.
For 14 to 18 year olds
www.steinroe.com ? Sponsored by the investment company of SteinRoe and Farnham in Chicago, which also has a mutual fund designed especially for kids. The Stein Roe Young Investor Fund invests in companies that kids tend to know: Apple, Cisco, General Electric, Microsoft and others. It carries Morningstar's highest performance rating of five stars and returned an annual average of 29.9 percent for the five years through 1999. You need a $100 minimum to start and at least $50 a month after that.
www.youngbiz.com ? A stimulating site that also tracks the performance of stocks that teens are familiar with and has articles about student investors and student-run businesses as well as career planning advice.
www.ssa.gov/kids/faq.html ? One of many good sites presented by U.S. Government agencies. This one tells you just about all you would want to know about the Social Security System.
For parents and children alike
www.kidsmoney.org Replete with articles on how parents can teach their kids about money and also a section where parents vote on the most important principles about money to impress upon children. There are also many suggestions for ways kids can make money such as taking pictures at parties, typing papers and raking leaves.
www.kiplinger.com/managing/kids ? An excellent site that helps parents determine ways of financing everything from summer camp to college, and more. It offers advice about setting up a checking account for your child and information on how the IRS assesses chore money. (Any income your child earns over $4,300 will face federal taxes at the 15 percent level.) There is a "piggy bank calendar" that helps kids plan their savings to pay for camp, clothes and even college.
Along with well-produced online assistance, brokerage houses, mutual funds and government agencies also provide teaching aids for children. In the last several years, a number of summer camps, seminars and publications have sprung up for the same purpose. There are dozens of camps listed on www.kidscamps.com under business camps. Here are some of the various options:
The Wall Street Journal Classroom Edition is a comprehensive program sent directly to classrooms for $165 a year. Each month during the September through May academic year, 30 copies of a 24-page, four-color Wall Street Journal classroom edition is sent to a schoolroom.
In addition, the teacher gets one subscription to the regular daily WSJ. The well-edited monthly edition is directed at middle school and high-school students and has domestic and international stories about enterprise, careers, technology, marketing, investment and more. To order, call 1-800-544-0522, ext. 2172.
A tip: Often schools enlist parents or local business people to sponsor subscriptions. The edition also offers optional quarterly videos produced by CNBC in which stories are drawn from the monthly paper.
Camp Start-up in Wellesley, Massachusetts has a two-week program in which girls aged 13 to 18 create faux businesses and hear talks by accomplished businesswomen. Cost: $1400. Phone: 800-350-1816.
Millennium Entrepreneurs, based at the University of San Diego, offers one-week sessions at places from Hawaii to Washington, D.C., for boys and girls aged 8 and up. They study the stock market, manage checking accounts for their spending money, and learn financial basics. Cost: $675 to $1,575. Phone: 619-476-7655.
American Computer Experience offers computer camps at 75 universities where campers aged 7 to 16 learn how to program, build a Web site and run software applications. A five-day session costs $800. Call 800-386-4223.
Merrill Lynch offers a ton of free materials for teens, including pocket quizzes, lively comic books about "Savin' Dave and the Compounders" and brochures on such topics as "Ten Ways to Talk with Your Teens about Money." (Call Kate Hines at 609-282-4089). Morgan Stanley Dean Witter produces similar packages (Contact Bret Gallaway at 212-762-7843) as do many other brokerages.
As for practical experience, along with discussing family finances with your children, start giving them stocks, savings bonds and other assets for birthday or holiday presents and suggest to grandparents, other relatives and grown-up family friends to do the same.
While it might seem logical to buy shares of mutual funds, kids tend to grasp the ups and downs of specific companies better than those multi-flavored funds. When buying stocks, it often helps to choose shares of companies that children can relate to, such as Wrigley, Disney or McDonald's.