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MONEY SMART KIDS
Kids Money Club
by Janet Bodnar

I am starting a money-saving and education club with my six grandchildren, ranging in age from 3 to 12. What is the best course outline to set up? I want to make this fun, too.

What a great way to bridge the generation gap! Not only will your grandchildren benefit from the financial knowledge they'll gain, but you and the kids will have a special activity that you enjoy together.

I'd suggest that you put more emphasis on having fun and less on setting up a formal course outline. That's especially true because there's such a big difference in the children's ages.

Twelve-year-olds are by nature far more sophisticated about money than 3-year-olds. While you could include the youngest, don't expect much understanding until a child reaches age four or five.

For that reason, I'd set up different activities (rather than formal lessons) for each age group and keep them simple.

For preschoolers, focus on hands-on activities. Buy each child a fun savings bank that they can play with. To encourage them to save money, help them choose an item they'd like to have -- a toy, book, or collectible -- and tape its picture to the bank (or even to a colorful money jar).

Show them what different coins look like, and tell them that each has its own value. Let them use coins to buy juice from a vending machine or ice cream from a vendor, so they learn that money can be exchanged for other things. Start a collection of state quarters.

Once your grandchildren are in grade school, take them to the bank and help them open a savings account. Explain that they can earn interest in exchange for keeping their money on deposit.

Encourage them to save for larger yet tangible goals -- a new baseball glove, videogame or article of clothing -- and perhaps offer to match a portion of what they put aside. Play financial board games with the kids, especially classics such as "The Game of Life" and "Monopoly."

Because you want this to be an ongoing experience, consider giving each child a weekly or monthly allowance from Grandma that the children can choose to spend or save for a larger purchase.

And take them to the store for a lesson in smart shopping. Dollar stores are great for the young ones; older kids can learn how to compare prices and shop for sales. And think of all that priceless together time!