As parents, we have a unique opportunity as well as a tremendous responsibility. Many adults are not financially savvy and do not know how to handle their money, but we must teach our children the fundamentals. Even a young child can be taught the difference between "want" and "need" and the concept of delayed gratification. Obviously, the best teaching method is by example. How can a young child understand that the money supply is not unlimited if we constantly respond to her every demand? Television advertising -- especially during the holiday season -- makes it even tougher for parents.

Opening a savings account is a great opportunity for parents to explain that money in a savings account earns interest while it is waiting in the account. It is often helpful for a child to set a short-term goal for the money, such as a new toy or other inexpensive item, so the goal can be realized in a relatively short time period. Nothing succeeds like success, and it is easier to begin saving toward something else after the first goal has been realized. The time horizon can get longer as the child gets older and understands delayed gratification.

The lessons learned by saving also help children realize that parents cannot buy "everything" they see. It is never easy to refuse a child's request, but we are teaching an important lesson when we say "no" and share the explanation for the refusal.

During the holiday season, the temptations are undeniably greatest. Everywhere a child turns, advertisements abound, toys entice, displays beckon. The message the stores give out is clear: "You need this toy to be happy, to belong." Even if we had unlimited resources, we would be doing our children a great disservice if we purchased everything they request. Have your child make a list of the things he really wants, and then explain that he needs to select one or two items from among the many listed. He'll learn to prioritize his selections and make a decision.

Another important lesson to share during the Christmas/Hanukkah season is generosity. Help your child understand that it is good to give as well as receive. Even with a small allowance, a child should be encouraged to give small gifts of his own choosing. As a parent, you will probably be given gifts you wouldn't necessarily choose for yourself. I still treasure a "terrible looking" necklace that my sons bought for me at a garage sale. The gesture and the care that they put into the purchase touched me, not the value of the gift.

You also can encourage children to give to those in need -- let your child choose a toy she no longer plays with, and take her with you to donate it.

The lessons we teach our children provide the framework for their savings and financial attitudes for a lifetime. By helping our children learn financial responsibility early on, we're starting them on the path to success.

For more information on financial planning topics, or if you need a financial planner, consult the International Association for Financial Planning's Web site at http://www.iafp.org or contact them toll free at 800-945-4237.