It’s been said that a penny saved is a penny earned. And it’s likely that parents who teach their children to count their pennies today are grooming them for the money management skills they need tomorrow.

Angie Haas of Harrisburg, Penn. is the mother of a 10-year-old and a 2-month-old. She says it’s important for her 10-year-old daughter to begin learning money management skills at this point in her life. "Kids are given too much these days and it's important that they learn how to work for things so that they can make it on their own someday," Haas says.

Financial security is an important part of independence, and preteens are at an ideal age to learn what money is all about. Getting in the right lane of the financial highway at an early age may lead to smart financial choices in adulthood.

Another Day, Another Dollar
Sheila Diaz lives in Washington state and is the mother of two boys, ages 10 and 12. Her sons receive $20 per day working in the Diaz family business.

"They really appreciate the value of a dollar," Diaz says. Working for money is a sure way to gain that appreciation.

Diaz's sons recently purchased a video game system that did not live up to their expectations. She says her youngest son went to bed crying, "All that work, and for what? Nothing!" The next day the boys requested a ride back to the store to express their dissatisfaction with their hard-earned purchase. The store agreed to exchange their purchase for another system, which they are now happy with. One can't help but wonder if these boys would have demanded satisfaction with their purchase if they hadn't worked so hard to earn it.

Laurie of Lake Arrowhead, Calif. recalls her son's first venture at earning money at the age of 10.

"He started to receive money for extra chores at home like helping to wash the car or raking pine needles," Laurie says. By the time he was 11, neighbors hired him to do small jobs like yard work and babysitting. Now a teenager, her son earned $450.00 in six months while maintaining high grades in school. He has a personal savings account as well as a student account.

Money Here, Money There
Veronica from Jersey City, N.J. is the mother of 11-year-old Tabetha. Tabetha enjoys saving money so much that after Christmas she opened her own bank account. "It's all my own," she says.

This money-conscious preteen does chores around the house to earn a $6 weekly allowance, which she allocates to different things: $1 goes to the bank, $1 is reserved for “play” money and the remaining $4 is classified as "junk and smart stuff," according to Tabetha’s mother. "Junk" could include chips or a new pen. "Smart stuff" could be anything from clothes to video games, or compact discs to gifts.

Money that Tabetha receives as a gift is usually split evenly between spending money and bank money.

Veronica says one of the reasons her daughter is good with money is because she listens to their family stories.

"My side of the family had eight kids and my parents didn't have much money to pass around," Veronica says.

A Realistic Approach
Dr. Flora Williams is a professor of family economics and financial counseling at Purdue University. Dr. Williams recommends that parents explain to their preteens that wants are continually expanding – but resources are limited. She encourages parents to spend time comparison shop, as this might teach kids to curb impulse purchases. "When money does not stretch, let it be a challenge to your creativity," Dr. Williams says.

There will always be those with more money and those with less. "Instead of saying 'we cannot afford,' say, 'We choose this for now.' This approach encourages communication and a positive concept where saying 'we cannot afford' does not," Dr. Williams says.

Finance 101
Todd Shepard is a financial planning specialist with Gent Financial Group in West Hartford, Conn. Shepard advises parents that preteens will absorb the teachings of their parents at different stages of their development.

"While consistently leading by example is always the best way to educate and lead your children down the right paths, my experience is that children will develop financially as part of their maturity process," Shepard says. "There must be 'financial hormones' in there somewhere."

Shepard says preteens will become financially savvy when they realize that money provides them power – something that preteens otherwise tend to lack at this stage of life.

Above all, Shepard suggests keeping it simple when giving financial lessons to a child. "Discussing the concepts of long-term savings and compound interest with a child who is not ready to listen is like trying to convince a child that the Rolling Stones are way cooler than the Backstreet Boys."