At this time of year I normally suggest board games as gifts that will help your child learn more about money. Since my daughter is at the age where real money is more intriguing than Monopoly money, I want to offer some other ideas on how to help your teenager learn more about money over the holidays. The list below contains "gifts" that you can offer to your teen if they don't already have these financial tools. Next week, if you don't mind, I'll talk directly to your teen about how to handle these gifts. I'll be nice, I promise.

A Checking Account: If your child is under 18, you know how difficult it might be to set up financial accounts for that child at your local bank. Most banks require parents or guardians to set up a joint account for teens under legal age. While a joint account is designed for parents to keep track of a child's financial activities, this practice is a bit unfair to the teen when he's suddenly set free after graduation. The child who isn't allowed some financial freedom as a teen will flounder in college if you aren't there to hold his hand through some basic trials. Even with this limited exposure to financial responsibility (same as financial freedom), if your child doesn't have a bank account - even a joint account - you can open one for him this holiday season.

The checking account will allow you to teach your child how to write checks and how to read and reconcile a bank statement. You can then explain bank fees, overdrafts, and the inherent dangers involved with ATM and Debit cards. By the end of this next year, your child could be adept at handling these basic life skills.

If you're a bit squeamish about opening a checking account for your child, you might read how Melinda Sacks felt as she watched her learning-disabled 18-year-old manage his new checking account. Perhaps she can offer some hope and guidance for you in this situation.

Savings Account: Most banks now offer about 5% APR on savings accounts, and that interest can accumulate quickly if the child has an early savings start. If you haven't opened a savings account in your child's name, it's never too late - do it now. This account could represent a deposit-only account that has a goal attached to it. In other words, this account could be a means to save for certain items like a car or a trip overseas after graduation. If the goal is enticing, the reason to save will be just as juicy for your teen.

You might open this account with just as much money as you would have spent on holiday gift items, and that deposit will give your teen a healthy start on earning compound interest. Then, leave it up to your teen to add to the account. You might suggest that he or she ask relatives to give money for gifts rather than disposable items so they can accumulate more wealth over the upcoming year. I'll explain compound interest to your teen next week so that they understand how quickly they can accumulate money in this endeavor.

Credit Card: I can see the hair rising on your neck from here at the mention of a credit card as a gift for your teen - it can feel like giving Godzilla free reign to Metropolis. I agree that credit cards are only beneficial when used as tools to help build good credit, and this credit building is denied to teenagers with the options that I offer below. But I'm also an advocate for teaching a child how to handle financial tools responsibly. They don't learn about credit card skills in school, so you have the onus upon you now if you don't want your child to end up with a financial mess in college.

If you don't teach your teen how to handle a credit card now, you'll deny that child the opportunity to learn about the negative effects of compound interest and how that interest can eat away at savings. Additionally, this early entrance to credit card reality provides you with an opportunity to learn how credit card companies entice college students with free offers. You can help your teen learn how to avoid these tactics when you hand responsibility over to them under your supervision at home.

The teen with a credit card needs a monitor, so the best way to introduce your child to this financial tool is to give them: a) a card with a limited spending amount, similar to a VISA BUXX card or a debit card, or; b) a card with a limited amount that's attached to your account, only with his or her name on it. Read Liz Pulliam Weston's common-sense advice to parents on this matter for further suggestions. I'll offer some information to your teen next week so they understand your concerns about credit cards.

Finally, you might read an article about Teen Identity Theft offered by Stanford Federal Credit Union. This short piece contains some sensible tips for you and your teen to learn how to protect your identities and to safeguard your valuable information.

Granted, you might not want to give your teen all the financial tools shown above at the same time. You might start with the checking and savings accounts this year and then offer a credit card to them next year after they've learned a few lessons about compound interest and - alternately - about fees that financial institutions charge for money handling.

While you might worry about the lack of packages under the holiday tree with these suggestions, you could soon discover that your teen prefers money to pre-selected gifts that are soon forgotten. The financial responsibility/freedom opportunities that you provide for your teen under your guidance, after all is said and done, will last a lifetime.

Until Next Week,
Linda Goin