In my last column, I talked about the importance of teaching children about money – and how to make it fun. Since I started with advice on how to handle two-to-five year olds, let's now talk about older kids.

For Children Ages 6 to 10: Trade Places for a Day

Now that my son has turned 10 years old, he's increasingly interested in demonstrating his maturity. Sometimes I give him extra responsibilities to foster his growing sense of identity. I might have him take out the trash or shovel snow from the driveway. But to also develop his money savvy, I sometimes put him "in charge" of the household money. You can do the same thing with a young child in your life, or someone you mentor – just by trading places with the child for a day.

Pick a Saturday, for instance, when you have errands to run. Take your child to the gas station, the bank or the cleaners. Set guidelines, but allow your child to be "in charge." At the supermarket, you might say: "We need nutritious snacks, along with breakfast, lunch and dinner for the week, and we have $100 to spend." Then let your child figure out what to buy. Depending on your child's math skills, let him or her run the numbers in their head, or use a calculator. With this activity, your child will learn how to save money and comparison shop, because he'll understand that your family doesn't have unlimited cash.

Kids in this age category get a kick out of making "grown up" choices, which will boost their confidence about handling money and plant the seeds for making good financial decisions later in life.

For Adolescents Ages 11 to 15: Let Them Plan a Vacation Teenagers – and the "tween" set – are incredibly savvy, especially with technology. They love email, instant messages or text messaging their friends, and almost anything involving the World Wide Web. So I once let my oldest daughter, who will turn 13 this year, tap into her Internet fascination by letting her help plan a family vacation online. In the process, I hope she became more financially astute.


You can do the same thing. Taking your budget into consideration, let your teenager plan a family outing. It can be as simple as a day trip to a local venue, or as involved as a week-long vacation to a far-flung destination. The catch, of course, is that your child has to stick to a pre-determined budget. Tell your child: "We can only spend 'X' dollars on this trip." Then the teen's challenge will be to scour the Internet, bargain hunt, and find a vacation that your family can enjoy – all within your price range.

Young Adults Who Are 16 to 21: Poke Fun at Yourself

As teenagers turn into young adults, they face increased peer pressures and outside influences. Around this time, they also figure out – despite our best efforts – that parents aren't perfect people who know everything. In fact, sometimes we can blow it royally. Good parenting involves being able to laugh at yourself – even your money mistakes. Your kids will better relate to you, and learn some practical financial lessons if you have the courage to tell them "the worst financial decision I made at your age" or "my biggest money mistake in my youth."

For my part, I have loads of embarrassing stories. Like the time I was in college and I bought a boyfriend a $350 leather coat for Christmas – instead of paying my car note. I paid dearly for that stupid mistake: my 1987 Hyundai Excel wound up getting repossessed. Then there was the time, at age 20, that I fell for an "advance fee" scam. Someone called over the phone promising $1,000 if I just paid a $250 fee upfront. I learned a whole set of lessons from that fiasco. When my kids are of age, I'll share these and other tales from the trenches with them. Hopefully, they'll chuckle at my past missteps – and avoid costly mistakes of their own.

Traditional ways to teach children about money – such as doling out allowances, or rewarding kids financially for exceptional accomplishments and stellar behavior – will probably remain time-honored techniques in many families. But by adding the strategies above to your repertoire, you'll also make personal finances far more fun and memorable for the next generation. And that will be a wonderful financial legacy to leave behind.

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Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has also been featured in top newspapers including the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money.