For most children, an occasional game of "Monopoly" and a piggy bank stuffed with pennies is the extent of their early financial education. But Neale Godfrey's two children, ages 5 and 8, already have bank accounts, are saving for their college education with certificates of deposit and divide their weekly allowances among savings, charities, lunch money and funds for special purchases.
"I was determined that my kids would not be financial illiterates. They would learn about worth and value, and how difficult it is to earn money," says Ms. Godfrey, founder of Children's Financial Network Inc., a New York consulting firm.
When children are about 3, they start talking about money, says Ms. Godfrey, former president of First Women's Bank in New York. "When they become aware of it, you should be aware of it."
Teaching very young children about money will not make them greedy and materialistic, she says. "Just the opposite. [Knowledge] teaches them respect for money and that there is a correlation with earning and spending. Money itself is neither good nor bad. It's what is done with money that counts."
Ms. Godfrey and other experts say learning how to handle money is an essential part of a child's education and that parents owe it to their children to teach them how to manage it. "They certainly make buying decisions and are certainly consumers at that age," Ms. Godfrey says.
Emmanuel Modu agrees. Mr. Modu, who wrote "The Lemonade Stand: A Guide to Encouraging the Entrepreneur in Your Child," a book that will be released in October, says 4- to 6-year-olds are ready to begin learning about money.
"Your first two goals should be to familiarize your kids with currency and to help them understand the value of money as a medium of exchange," he says. "You can explore these currencies with your children through play or by introducing them to hobbies that involve keeping track of money."
William Frank, assistant vice president of First National Bank of Maryland, says his two children, 6 months and 2 years old, are still a bit young for high finance. Still, he says, "it's important to reinforce good habits of thrift" at an early age.
"On a personal level, I think the appropriate time to teach them the value of a dollar and provide them with a small allowance is rTC around the first or second grade," he says. "Any younger than that is too young. But once they go to school and have to buy lunch, they realize how far a dollar can go."
Some parents know they should teach their children about handling money, but the subject makes them uncomfortable.
"Money is like sex was 20 years ago," Ms. Godfrey says. "People knew about it, they had the facts, but they weren't ready to discuss it and didn't know what to do with it."
But even people who are not financial wizards can give their children the basics of money management. Here are some suggestions:
* Tell young children entertaining stories involving money.
In "The Kids' Money Book," published by Checkerboard Press Inc., Ms. Godfrey describes how a group of animal characters handle their finances. The characters include a dog named Dollar Bill -- "Buck" to his friends -- who tries to save but sometimes gets his attention diverted; a rabbit known as Small Change who lives in Buck's pocket; Penny Bright, a savvy feline entrepreneur who knows her fashion and her tax code; and Not-So-Bright, her brother, who thinks all that glitters is gold.
Other characters include the market brothers -- Bull and Bear -- who run the Blue Chip deli, and a hedgehog, a hedge against inflation who sells, naturally, balloons.
* Encourage children 3 to 6 years old to play sorting, stacking and counting games with coins of different values.
"By the time they're 5 they should start stacking," Ms. Godfrey says.
* "From about 5 on, play games with them on shopping trips," Mr. Modu suggests. "Have them pick up items on the shelf and note what they cost." Eventually, he says, parents can help children compare prices of cola, bread or milk.
* Give them an allowance and encourage saving. Some parents think their children's allowance comes in the form of food, clothes and a roof overhead. They may think that children will spend all of a monetary allowance on frivolities.
Ms. Godfrey started giving her children allowances when they were about 3 years old. "They did their chores for money," she says, to establish the notion that if they worked they would get paid.
"Giving them an allowance eliminated 'I want, I want, I want,' " she says. "They have their own money, and they know not to ask" her to buy things for them. Her children earn a few dollars a week each.
But Mr. Modu advises against tying allowances to chores. "They run the risk that their kids will decide that the amount of money they are 'fined' for not doing their chores is worth not doing the chores," he says.
He thinks children who get allowances with few strings attached will make up their own budgets. "This discretionary power enables children to develop their decision-making skills and to gain more self-confidence -- two characteristics of entrepreneurs," Mr. Modu says.
* Encourage children to donate unused toys or even a part of their allowance to charitable organizations or their religion. Part of learning about money is learning about generosity, Ms. Godfrey says.
* Involve older children in household financial decisions. A family discussion on how to spend "found money" will help the children take responsibility for the decision.
* Visit museums with exhibits that demonstrate financial concepts.
At the Museum of Industry in Baltimore, for example, a re-creation of an 1880s oyster cannery gives schoolchildren a glimpse of how industry and the economy are linked.
* Enroll a child in a financial workshop designed for children. Loyola College in Baltimore, for example, conducts a money-management camp for young people, now in its second year. The one-week summer sessions accept students in grades seven through 10, ages 12 to 16.
Therese Steen, the camp's executive director, says teen-agers are not too young to learn advanced finance. "Earlier and earlier, kids are considering how to pay for car insurance and college loans," she says. "We try to provide them with an overall sense of the responsibility that comes with money."
Karen Webster conducts a workshop at the money-management camp on "becoming a young entrepreneur."
Ms. Webster, director of marketing for the Baltimore accounting and consulting firm C. W. Amos and Co. says 12- to 14-year-olds are at an ideal age to learn about starting and operating a business.
"They are beginning to develop some sense of money on a small scale, they may have an allowance, and they can relate to the marketability of a product or service," she says. "They are interested and creative. Their minds are just racing with great ideas."
Adriane Miller is a free-lance writer who often covers business issues for The Sun.