WHEN IT COMES TO SAVING MONEY, IT'S. . . NEVER TOO EARLY TO LEARN; EXPERTS SAY PARENTS SHOULD BE TEACHING CHILDREN TO PRACTICE FINANCIAL DISCIPLINE AT EVERY OPPORTUNITY.

Byline: Suzie St. John Staff Writer

After a recent shopping excursion with her grandma, 6-year-old Morgan overheard her grandpa asking if they had spent a lot of money. Before grandma could reply Morgan piped up and said, ``We didn't spend any money Grandpa, we used a credit card.''

What would have been the perfect opportunity to explain how credit works was met instead with a hearty round of chuckles by Morgan's family.

That is what Don Blandin calls a teachable moment.

``There are hundreds of them that arise during the week as parents and children spend time together,'' said Blandin, who serves as president of the American Savings Education Council.

``Kids are kind of amazed when you talk to them about all of this. The earlier they learn, the better off they'll be in the long run,'' Blandin said.

Paul Yakobsky said kids learn about money in two ways: By what parents teach them and by what they observe from their parents.

``If parents never talk about money, they learn it's a taboo subject, but if parents talk about it openly and discuss budgets, kids learn that money is something to be managed,'' said the director of research for the Washington D.C.-based ASEC.

ASEC's 1999 Youth and Money Survey asked young adults ages 16 to 22 questions about how they manage money, their attitude toward money and where they learned about it.

Yakobsky said the most telling thing revealed was the lack of financial discipline among respondents.

``It really highlights the importance of parents instilling good financial behavior at an early age,'' Yakobsky explained.

He believes one of the first lessons to be taught is earning an allowance for completing certain household chores.

``By teaching your kids the remedial importance of earning and saving early on, you are well on your way to creating a financially savvy kid,'' said Yakobsky.

The next step after a child earns money is what to do with it. The traditional piggy bank continues to be a favorite for toddlers everywhere, but there is a wealth of additional alternatives available including savings accounts, savings bonds, stocks and mutual funds.

Most financial institutions offer savings accounts for children. For example, Bank of America has a student savings plan for children under age 18 that requires a $25 minimum deposit with no monthly service charge. Parents can also open an ``in trust for'' account that is in their name but is for the child. There is no age limit, no service charge and it requires a $25 deposit.

``Those accounts are very popular because parents like to have more control over the account,'' said Dey Robillard, a personal banker with Bank of America's Woodland Hills branch.

She added that savings bonds continue to maintain their popularity, especially as gifts for children. The purchaser buys the bond for half of its value and it matures in 14 to 15 years.

Financial consultant Chris Willis uses the stock market as a tool for teaching his daughter about the importance of savings.

When she receives a gift check from someone she has the option of using it to buy stock shares in a company she is interested in. As an added incentive, Willis says he will double the amount of the gift so she can purchase twice as many shares. For example, a $25 gift was doubled and used to buy two shares of Disney stock. She is now able to use the Internet to track her portfolio and see her investments increase.

Willis admits there is always volatility involved with stocks.

``There is more potential growth with individual stocks and certainly more potential risk if it doesn't do well,'' said Willis who is a consultant for Financial Network Investment Corp. in Pasadena. ``It's up to the parents to evaluate their own level of risk.''

Mutual funds for kids are increasing in popularity. Several companies offer programs geared toward kids, treating them as the investor.

Blandin said his children, ages 9 and 11, have three piggy banks in their rooms. They designate a portion of their allowances to go into each of the three. Funds in the first are used for immediate gratification; the second is for items that cost more and take a little longer to save for; and the third is for investing.

``They have a mutual fund that made 32 percent last year,'' Blandin said. ``You can teach your kids all about finances but it's much better to let the kids do things themselves. You wouldn't believe what a sense of accomplishment they get.''

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PHOTO (color) no capption (child's hand putting coin in piggy bank

J ohn McCoy/Staff Photographer