Presented by Cary Stamp

The sooner the better: it’s a saying that applies to many facets of life, including educating children about money. By introducing sound financial habits early on, you’ll give your child a head start on the path to becoming an informed investor. Here are some creative ideas, as well as book and website suggestions, for raising a financially savvy kid.

Lessons for Every Age

Toddler. Although it may seem early to begin instilling investment know-how in your child, the first few years of life are critical for mental development. Toys that incorporate counting, such as building blocks, can help your child develop mathematical skills. Other educational toys include:

· LeapFrog Learn & Groove Animal Sounds Guitar. Through rhythm, rhyme, and sing-along songs, children can rock out while sharpening their counting skills.

· Learning Resources Counting Cookies. This set of 10 numbered cookies (each with a corresponding number of chips) makes learning to count delicious.

· Chicco Teddy Count With Me. Children can learn first numbers and words in English and Spanish with this bilingual talking bear.

· Infantino Counting Penguin. As your child inserts colored fish into its mouth, this penguin counts from 1 to 10.

· ABC 123 Magnetic Poetry Kit. For older toddlers, these magnets promote learning letters and numbers.

Age 5-plus. Board games are an entertaining way to teach kids about managing finances. Monopoly covers all the bases—earning money, saving and spending, capital budgeting, risk and reward, and taxes. This classic game now comes in an electronic banking edition and even as a smartphone or tablet application. Other options for a fun-filled family game night include The Game of Life, Billionaire Tycoon, Moneywise Kids, and Pay Day.

Age 8 to preteen. At this stage, many children start to accumulate income from allowances, cash gifts for birthdays and special occasions, and even small businesses, like lemonade stands or shoveling driveways. As your child begins dealing with actual money—no matter how small the amount—talk to him or her about saving and spending. Since many kids in this age group are Internet experts, online games can be an effective teaching tool.

Teenage years. As a teen, your child may take his or her first summer job or build income through part-time work like babysitting. Visit the local bank together and set up personal savings and checking accounts in his or her name. This will give your child a sense of responsibility and help familiarize him or her with different banking transactions. Plus, banks often offer useful resources geared toward young customers.

Off to college. The transition to college is typically accompanied by a slew of credit card offers. Before sending your child off to school, be sure to discuss the pros and cons of credit cards and how to establish credit responsibly. Prepaid credit cards can be a good way to help college students build their credit history.

Young adulthood. Amid the excitement of a first job, it’s all too easy to overlook retirement plan contributions. Remind your child of the benefits of opening a retirement account early—he or she is sure to thank you later. At this point, you may wish to pass the baton to your financial advisor, who can address any money management questions your son or daughter encounters on the road to financial independence.

Prologue to success: books

Books on personal finance kill two birds with one stone, getting children to read while teaching them an important life skill. Full of illustrations on all aspects of money and finance, Neale S. Godfrey’s Ultimate Kids’ Money Book is a great resource for ages 7–12. For ages 13 and up, Growing Money: A Complete (and Completely Updated!) Investing Guide for Kids by Gail Karlitz and Debbie Honig focuses solely on investing.

Written especially for parents, Yes, You Can . . . Raise Financially Aware Kids by Jack Jonathan includes activities that you can do with your child to put financial concepts into practice.

Wired for wealth: online games

One of the best websites for teaching kids about money is www.monetta.com/game.htm, presented by the Monetta Young Investor Fund, a mutual fund that invests in companies familiar to children and teenagers. While most of the games can be found elsewhere online, the site brings them all together and organizes them by age group. The games are free and range from basic quizzes to more advanced activities.

Of course, there are plenty of other websites that aim to help children build their financial literacy. But remember: although the Internet can be a valuable tool, it’s no substitute for one-on-one conversations and your own good example.

Start early!

As with many financial matters, the best advice is to start early. The sooner children learn financial fundamentals, the more likely they are to become informed investors later in life. You may even benefit from learning alongside your child! If there are areas where you could use a refresher, take the time to review those topics as you approach them with your son or daughter.

Leading by example makes good sense, no matter what the lesson at hand may be. If you’ve been meaning to work on your budget, organize your tax documents, do a retirement checkup, or pursue another financial goal, there’s no better time than today to take control. A financial advisor can help you set the right example for your child and may even join you in fostering his or her financial literacy.

Cary Stamp is a financial advisor located at Cary Stamp and Company, 110 Bridge Road, Tequesta, FL 33469. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 561-208-8332 or at cary@carystamp.com

© 2012 Commonwealth Financial Network®