Debbie Schrade of Fort Wright, Ky., has always preached to her 16-year-old son, Will Lalka, about the importance of saving money.

When he was younger and received monetary gifts and an allowance, he set half of it aside in savings. He has continued that practice since getting a job last spring at the Remke Markets store in Crescent Springs.

"I'm going off to college in two years," says Will, a junior at Villa Madonna Academy in Villa Hills, Ky., "and I figured if I have some money budgeted for books and things like that, it'll be easier for my mom."

Crystal Faulkner is a certified public accountant and financial adviser with Cooney Faulkner & Stevens, the Cincinnati firm that founded Accounting for Kids Day, a statewide financial literacy program. She says parents can encourage their teens to save by matching some or all of the money they sock away.

It's also important for young people to see how their money can work for them through savings, Faulkner says. When her oldest child was a teen, a portion of his earnings was invested in a Roth IRA. Faulkner explained to him that if he contributed $2,000 a year from age 16 to 22, his investment would grow to about $1 million by retirement age (assuming an average return of 10 percent).

"It's cool for a kid to get a (financial) statement in the mail and watch their money work for them," she says. "It's all about the magic of compounding."

Some of Will's earnings are invested in mutual funds. But he's a teen, after all, so he allowed himself to splurge on a new Xbox video game console this summer. "Everybody likes rewards," he says.

Helping children distinguish between "needs" and "wants" should begin when they're young and continue through the teen years, Faulkner says.

"When people get in trouble with spending, it's usually impulse buying," she says. She suggests parents help their teens with budgeting, such as for back-to-school clothes.

"Give them magazines and fliers out of the paper. Let them find the best bargains. It gives you a great opportunity to converse about a budget and (explain) why it's important."

It's also important that parents clarify what they'll pay for, and what the teen is responsible for.

Faulkner suggests that teens keep track of their money by opening a checking account and keeping it balanced. Parents should encourage them to make regular deposits. "Make them accountable for how every dollar is spent."

Overall, Schrade says her son "does a really good job of budgeting and curbing his I-really-want-to-buy-this (mentality)." She's gradually giving him more financial responsibility. She provided him with a car and $50 a month gas allowance; soon he'll be paying for insurance, gas, tags and the like.

"I don't always want to (save)," Will says. But he acknowledges that "saving helps, big time."

WATCH TEENS' PLASTIC

Almost 11 percent of 17-year-olds in the U.S. have a credit card, and 45 percent have a checking or debit card, according to a nationwide poll of 1,512 teens conducted last fall for Junior Achievement Worldwide

A sign the cashless society is coming? Maybe. But there are differing views about whether young people should carry plastic.

"Plastic doesn't represent real money to kids, not even to kids who are in high school or college," says Janet Bodnar, author of "Raising Money Smart Kids." She prefers that young people carry cash, so that they "feel the light wallet" after they've shelled out bucks for, say, a new video game.

But Neale S. Godfrey says there are advantages to teens having a preloaded debit card. Among them: parents can "see how (teens) are spending and if they're doing it responsibly."

Among the reloadable, prepaid cards designed for teens is the Visa Buxx Card. It's available through several card providers, including PAYjr (www.payjr.com). Parents can choose how to load the card electronically: a one-time load; recurring "allowance" loads or by direct deposit from the teen's employer.

Other features: Parents receive e-mail notification about card activity; and if it's lost or stolen, the owner pays nothing for unauthorized uses.

Bodnar, though, says that "kids see this as a direct line to mom and dad's bank account."

She also says parents should pay close attention to the fees attached. "It can be very expensive to set up this kind of transfer arrangement."

The PAYjr Visa Buxx Card charges a one-time start-up fee of $4.95 and a monthly fee of $3.95. It costs 50 cents each time money is added.

The Allow Card (www.allowcard.com), a prepaid MasterCard for teens, charges a one-time activation fee of $19.95, plus $3.95 shipping; the monthly access fee is $3.50.

The charges might be worth it if teens are learning to make responsible choices, keep track of purchases and stay within a budget, Godfrey says.

But Bodnar isn't convinced. The cards "make it easier for kids to spend money, in particular, online," she says. "Mom and Dad are going to top off the account, and you're not really teaching (teens) financial independence."