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Do you have any new ideas for how to teach saving and investing to our kids?

Mellody: It is still stunning to me that stock market fundamentals—actually, even the basics of saving and investing—are not taught in schools. That means the onus lies on parents to teach their kids. One fun way to get started is to institute a family 401(k) plan.

Most people are familiar with company 401(k) plans, but what about taking that concept home? You can offer to match your kids’ savings…anywhere from a small percentage like 10% to 100% of what they save. This will create a new generation of savers…teaching our kids not to walk away from the same “free money” they’ll be offered later in the form of a company 401(k) plan.

But what if your kids aren’t old enough to have jobs—or savings?

You’re never too young to start saving! Remember, you can match your teenager’s savings from their actual earnings from that summer job, but you can also match whatever potion of their allowance your kids may choose to save. Even the tooth fairy’s payouts can be matched! It’s also a great way for kids to learn math.

Any guidelines for our listeners?

Yes. Keep in mind that just like a company 401(k), this is a long-term savings plan; it’s not for your child to withdraw a week later. You might even consider instating a penalty if they do. Another caveat to consider: Only match what you can afford.

And on that note, while we’re trying to teach our children to save and invest, I have a put a plug in to parents: Many companies suspended their matching programs in the midst of cost-cutting frenzies brought on by the recession, but those numbers are back up now. The discouraging news is that while 73% of companies now offer matching programs, about 30% of plan participants don’t contribute enough to “max out” their company’s match. The best way to teach our kids to save is to lead by example.

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