THIS LITTLE PIGGY BANK ... WENT TO SCHOOL AND HELPED KIDS SAVE ENOUGH TO GO TO COLLEGE.

Byline: Evan Pondel Staff Writer

If piggy banks could talk, perhaps they would encourage children to save. But since they don't, parents and educators have to guide the hands of today's youth toward the piggy's belly, filling it with spare change.

``I like to save money for college and - toys,'' said Katie Floyd, a 10-year-old who attends Pomelo Elementary School in West Hills. ``And I've been saving for three years.''

When Katie was in first grade, the banking world was about as foreign as the decimal points and fractions that began showing up in her homework. But that changed when Washington Mutual went to school for show-and-tell.

Sue Russell, assistant financial center manager at Washington Mutual in Woodland Hills, has been visiting with Pomelo students for three years, preaching the value of money. Every Tuesday, Russell strolls onto campus with a folder full of bank statements.

``I'm here to help children understand how saving works,'' she said.

Washington Mutual has established a program with several schools across the state that entitles minors to open a savings account for a paltry sum - 25 cents. Every week, the bank meets with students, collecting the pennies that will eventually feed their future.

``With every four deposits, they get a reward - an eraser or pencil package,'' Russell said. ``And once they have $100, they can invest the money in a certificate of deposit.''

Washington Mutual has been visiting schools since 1923, attempting to teach tots and young adults the art of saving. Last week the company kicked off its Pixie Pig campaign, which includes a line of educational and novelty items to encourage saving.

Even so, convincing a 7-year-old that the $20 grandma and grandpa presented as gift money should be salvaged for the savings account is a difficult task.

So Lisa Zuckerman, a parent and banking volunteer at Pomelo, said she encourages her children to tuck the money away for a more grandiose gift, like education or a new car.

``Every time the kids get birthday money from their grandparents, we encourage them to save. And one of the most valuable tools is this savings account they've been able to open up because they actually can see the progress,'' said Zuckerman.

Virginia Ghoniem, principal at Pomelo, has been an advocate of the banking program since its inception. Ghoniem said the program provides incentives to save, while giving the children some form of responsibility.

``You can see the sense of pride the students have when they're carrying their savings envelopes,'' Ghoniem said.

Indeed, for some, the mere idea of a major corporate presence at a public school draws caution. All sorts of ethical issues arise, including whether or not a corporation - in this case, a banking behemoth - is there to educate children about saving or simply execute a marketing scheme, said Harold Kassarjian, a marketing professor that splits time between California State University, Northridge, and the University of California at Los Angeles.

``There is a degree of discomfort anytime business gets involved with the affairs of state,'' Kassarjian said. ``In this case, I think what Washington Mutual is doing is OK and there's probably some good in the long run. Some of these kids are getting out of high school and they don't even know how to write a check.''

There are other banks that have programs that simply educate, as opposed to advocating opening bank accounts.

California Federal teaches financial literacy to students throughout the state. In the fall, the San Francisco-based bank sponsored a program that taught general banking skills to more than 15,000 students.

``The program serves a few different purposes by educating children, but it also teaches our own core confidence in our product,'' said Stacey Sechrest, developer of California Federal's program. ``It's not always a final sales clincher, though.''

Despite all the programs offered by banks, there are also values that can be passed along to children that don't rely on a large corporation.

``There is a problem in teaching kids to save these days ... The new mentality is that you give them everything,'' said Rocky Mills, senior vice president of investments at Sutro & Co. in Woodland Hills.

Though the first word out of a child's mouth usually isn't ``stock'' or ``bond,'' that doesn't mean children shouldn't learn about the bears and the bulls. One impediment: Laws that govern trading rules insist minors cannot buy or sell stocks, leaving the trading up to the parents.

But if children can't invest in the market, then parents should involve their kids in purchasing stock, Mills said. Instead of buying shares in esoteric companies, Mills suggests investing in firms kids already understand.

``I always bought stock (my kids) knew something about, so I would invest in Disney, the Gap, Sketchers,'' he said. ``The kids would look at annual reports for these companies and think they were kind of neat, asking questions like, what does 'earnings' mean?''

CAPTION(S):

2 photos

Photo:

(1 -- color) Katie Floyd, foreground, and her schoolmates at Pomelo Elementary School in West Hills show savings pouches they got from Washington Mutual to help them learn about the value of putting their money away for college or a car.

(2 -- color) no caption (Child holding money)

Tina Burch/Staff Photographer