Help your kids buy smart.

Teach your child healthy spending habits

Kids have more discretionary income than ever before, so it's important that you help them spend their money wisely--especially since you'll ultimately be footing the bill for their purchases. According to Michael Searl's book, How to Make Money Make Sense to Children, (Summit Financial Products, $19.95) kids four to 12 years of age spend $7 billion to $11 billion each year on toys, videos, food, movies and other purchases. Teen consumers spend a hefty $100 billion annually.

As a first step to helping your children outsmart the aggressive marketing tactics of hungry advertisers, visit the Consumer Information Center's Website at www.pueblo.gsa.gov. One of the many publications the site offers, Playing the Buying Game, teaches children how to effectively evaluate products, packaging, print ads and TV commercials. Another resource, KidpreneursNews, is a new quarterly newsletter published by Black Enterprise Unlimited that contains articles to help kids learn to spend their money wisely.

The importance of providing your children with savvy consumer skills shouldn't be underestimated. According to Jane Schuchardt, national program leader of the Cooperative State Research, Education and Extension Service in Washington, D.C., "We spend a lot of money in our educational system to teach our children to earn money and spend very little time teaching them how to manage it appropriately. If this practice continues, kids will get into big financial trouble when they reach adulthood."

To give children a leg up on the consumer spending game, Schuchardt offers the following advice:

* Help children establish the difference between needs and wants. "Advise your child to think about whether they really need an item or want it," Schuchardt suggests. "If they realize that they do want the item rather than need it, then they should determine what quality and price range would fulfill their desire and meet their budget. For example, if a child wants [a pair of] jeans, they then must decide if they can settle for jeans that look good but don't have a fancy label."

* Stress comparison shopping. Show children how to get the best deals for their money by encouraging them to compare prices from different stores. Also, emphasize the importance of shopping for quality as well as price. And teach them not to underestimate the savings they can get by waiting for products to go on sale.

* Insist children set aside money for savings. No child is ever too young to start putting money aside. On average, people who have a financial plan save twice as much money as those who don't. You should encourage children to save some portion of the money they earn from part-time jobs, allowances or financial gifts.