Vancouver, B.C. (February 23, 2001): Educating our children and grandchildren about the values of money and investing is a lifelong process. We want them to mature into responsible adults who are ready, willing and confident to look after their financial matters.

This is especially important to parents who are having children later in life. These children have a greater chance of inheriting an estate at an earlier age and will have to have sufficient money savvy to manage the monies prudently.

Therefore, to succeed in teaching children a series of money values, fee-only investment counsel and financial advisor Adrian Mastracci notes, "Two essential ingredients for success are to make the learning a fun activity and to take it in small doses. This is a long-term project - parents and grandparents are in for a marathon."

Mastracci, president of Vancouver based KCM Wealth Management, comments, "Teaching children and grandchildren the value of money and investing is a great challenge for parents and grandparents. The legacy is one of building and constantly reinforcing -- one lesson at a time."

"Consistent year-after-year guidance from parents and grandparents has a tremendous affect on our children," says Mastracci. "Teaching them the value of money prepares them with the necessary tools for when they venture out."

Mastracci offers a list of important money lessons to teach your children and grandchildren. The suggested series of lessons within the age groups are arbitrary and are meant to be viewed as guides and food for thought. Hence, it is not necessary to stay with the suggested sequences or age groups as each child is unique.

The suggested money and investment lessons are grouped as follows:

Up to Age 5

• Explain what money is and what it looks like.
• Learn to buy and sell things by playing "let's pretend" games.
• Keep money in a safe place.
• Take the children on shopping trips.
• Identify coins by their correct names.
• Put coinage in order.
• Use money to buy items by trading coins for a purchase while shopping.
• The concept "When we spend money, it is gone."
• Treat money with respect.
• Start with the "spending" and "savings" jars.
• Start managing a small but regular allowance, say $1.00 per week in quarters.
• Agree on dividing the allowance between the spending and saving jars.
• Give children options to decide on how to spend the money.
• Begin the concept of saving for something small that they want.
• Know how many cents each coin is worth.
• Count cents out with a few coins at a time.
• Match small amounts of money with items that are affordable.
• The concept "We can't buy everything; we make choices."
• Know where the family money comes from (usually work).
• Let children make money decisions - even wrong ones.
• Discuss the implications and consequences of having made a money decision.

Age 6 to 10

• Make a list of items the child is responsible for, say some clothing.
• The concept of "Banks keep our money until we need it."
• Begin buying a child related stock, perhaps with gift money received.
• Open the bank savings account and begin making deposits.
• The "earning", "saving" and "spending" concepts.
• The concept "If there is no cash, you can't afford the item."
• Count larger amounts of mixed coins and understand coin equivalents.
• More structured division of allowance between spending and saving.
• Read price tags, look for items on sale and compare prices.
• he concept of "Pay yourself first" - say 10%.
• Involvement in simple family budget discussions
• Make change on a transaction and accuracy at making change.
• Match appropriate amounts of money with items to buy.
• Identify times the child "blows" money on things that do not last.
• Recognize TV commercials aren't always real life.
• Save toward a short-term goal, say up to three months.
• Realize money can be earned by doing extra jobs.
• Explain the concept of "interest" and "dividends".
• Attend a "shareholder meeting" of a stock owned.
• Make the connection between work and paycheques.
• Estimate the total cost of several purchases.
• Make a simple spending plan for the week and keep a money diary.
• Allocate money for expenses into separate envelopes.
• Deposit money regularly to a savings account.
• Look for ways to earn extra money for special purchases.
• Co-operate with family efforts to save money on items such as clothes.
• The concept of "buying only items required -- no wastage".
• Set goals for making several major purchases in the next six months.
• Save a small amount each week for a large purchase.
• Read and understand sale ads in the newspaper.
• Look for facts in TV advertising.
• Understand what a cheque is and that it takes money out of the bank.
• Introduce the ATM machine and credit cards.
• Become responsible for certain personal purchases.
• Reading the stock price page.
• Research stocks and stock portfolio upkeep.

Age 11 to 15

• The concept of "capital gains".
• The ability to see the "big picture".
• The concept of "being an owner".
• Calculate the cost of an item including sales tax.
• Make sure correct change is received from a purchase.
• Borrow money for an important purchase and then repay it.
• Look at the value, not just the cost, of products.
• Be aware of how peer pressure affects decisions.
• Save money for longer periods in a savings account.
• Design and operate a two-week spending plan.
• Classify fixed versus flexible expenses.
• Adjust flexible expenses to stay within a spending plan.
• Scan the classified ads to shop for bargains on used items.
• Read product labels and examine items for quality.
• The "credit card" concept and its implications.
• Understand the principle of "compound interest".
• Understand the value of wise investing.
• Recognize advertising techniques.
• How long it takes for money to double.
• Learn the meaning of "let the buyer beware."
• Use the phone book and call stores for information.
• Be comfortable asking questions when considering a purchase.
• Prepare a personal budget and be involved in the family budget.
• Discuss the cost of running your home - rent or mortgage, food, telephone, utilities, property taxes, eating out, personal items, gifts, car insurance and gas - and help the family save money.
• Understand and use the correct terms for banking transactions.
• Research a small-business enterprise.
• Write cheques on their own account and reconcile bank accounts.
• Start an RRSP deposit, if possible.
• Take responsibility for greater portion of personal purchases.
• Hold a part time job, as applicable.

Age 16 to 19

• Take responsibility of personal banking functions.
• Usage of the debit card on the "child's" account.
• Understand the operation of an investment club.
• The concepts of "present value" and "future value" of money.
• Amortization of loans and mortgages.
• Effects of making "extra" payments on loans and mortgages.
• Calculation of loan payments at specified interest rates.
• Understand the workings of a small business.
• Understand the cost and options of post-secondary education.
• Begin contributions towards the cost of post-secondary education.
• Manage and account for all budgetary aspects.
• Full understanding of the 'big picture'.
• Revisit all financial concepts periodically.
• Be able to fly solo!
• Job well done! Ciao!

"Building a child's confidence, the ability to see the 'big picture' and taking responsibility for the financial decisions pursued is a very satisfying accomplishment," added Mastracci, "Perhaps a side benefit is that you will also improve your own money skills."

Mastracci summarizes, "Leading by your examples will provide the best learning atmosphere for your children or grandchildren. All that work will shape them into financially responsible adults - an accomplishment you will be very proud of as a parent or grandparent. This marathon is well worth staying the course. Everyone is a winner!"