One for your money: investing as child's play.

There are funds for children that put their weekly allowance to work now for the future

Learning financial responsibility, like eating leafy green veggies, is obviously good for your children. Tally up the cost of those diapers and Cheerios, the juice boxes and cookies and the little necessities from BabyGap and Toys `R' Us, along with the Godzilla of them all--college--and your little bundle of joy will cost a big bundle of money! Experts say the cost of attending a four-year private college will run over $200,000 for each member of the class of 2016. Got your attention? Well, don't panic. It's never too late--or too early--to start teaching the value of saving and investing.

These days, the prepubescent set has more than just the proverbial piggy bank in which to stash their allowance or gifts from grandma. Mutual-fund companies, which revolutionized participation in the stock market by small investors, are now targeting the tiniest would-be financial titans.

The Stein Roe Young Investor Fund pioneered the concept of providing an investment vehicle for children while teaching them about investing. The four-year-old growth fund invests ,n stocks that mean something to kids, including McDonald's Corp. (NYSE: MCD), Coca-Cola Co. (NYSE: KO) and Walt Disney Co. (NYSE: DIS). The fund's kid-friendly newsletter, the Dollar Digest, features interviews with company CEOs, including the former head of McDonald's, Michael Quinlan, and also profiles companies, such as General Electric Co. (NYSE: GE). Scott Cooley, an analyst for Morningstar, the Chicago-based firm that monitors mutual funds, says Stein Roe sends out literature regularly, with plenty of illustrations, explanations of simple terms and a slant for kids. "It's the kind of thing adults who don't know much about investing could learn a lot from, too," says Cooley.

It doesn't hurt that the Stein Roe Young Investor Fund boasts an average annual return of 36.31% from March 1995 to March 1998, and will accept initial investments as small as $100 if you set up an automatic investment plan to salt away $50 a month. Without the automatic plan, the minimum investment for an account opened on behalf of a minor is $1,000. But the fund isn't limited to children. For all other accounts, there's a $2,500 minimum. For more information about the Stein Roe Young Investor Fund, visit the parent company's Web site: www.steinroe.com or call 800-338-2550.

Another long-term option is American Century Group's Giftrust, a fund that's managed to let investors give a gift to a child or another adult. Shares of the Giftrust are held in a trust for at least 10 years or until your child comes of age, whichever is longer. You can open an account with a minimum investment of $500; as little as $50 can be added at any time. Once the Giftrust matures, however, additional investments won't be allowed. Also be aware that there are two caveats: Once a Giftrust is opened, it can't be changed in any way and there are tax consequences--in fact, with every purchase (contribution) you must file a United States Gift Tax Return (Form 709). The three-year annualized total return is 4.74%. You can reach American Century at 800-345-2021.

While the majority of fund companies don't have mutual funds that cater specifically to children, under the Uniform Gift to Minors Act (UGMA), you can establish a custodial account for your child at any one of thousands of banks or mutual-fund groups. A UGMA account allows parents or other custodians to squirrel away money for minors and avoid a big tax bite from Uncle Sam. The first $650 of earnings is tax-free; the second $650 is taxed at the child's rate up until age 14. Earnings above $1,300 are taxed at the parents' top rate, even if the custodian is not the parent.

But be aware that there are drawbacks to custodial accounts. For one thing, your child will be in charge of the money once he or she is of age, at age 18 or 21, depending on where you live. For another, if the account is for a college-bound minor, there could be ramifications related to his or her financial aid package. Using the standard financial-aid formula, 35% of a student's assets must be used for higher education when calculating the aid, while only 8%-10% of parents' assets must be used. So, make sure whatever tax savings you would gain offset the possibility of losing some financial aid for college.