A new survey by Country Insurance and Financial Services found 43 percent of the 3,000 parents surveyed believe saving for retirement is more important than saving for college. An equal number believe socking away towards college credits is the priority.

About six in 10 parents plan to take responsibility for the bulk of college costs. I have to say I’m on the fence about this. While I certainly don’t want my kids to start out with loads of debt, I think I took my education for granted because I did not understand or appreciate the cost.

Should students pay part of their way? Or is paying for college a parent’s duty?

Thanks to Aimee for wedding week.

The wealth gap we most often hear about is the gap between the very richest and the rest of us.
But the USA Today had a story about another generation gap you may have noticed within your family or workplace: The gap between baby boomers and those of us in our 30s.

In a nutshell: The median net worth of 55-59 year olds over 15 years (1989-2004) rose 97 percent and incomes rose 52 percent. For 35-39 year olds, median net worth dropped 28 percent over the same period and incomes dropped 10 percent.

It only looks slightly better for people in their late 20s.

Median net worth for 55-59 year olds is about $250k. For 35-39 year olds it’s roughly $50k.
Sound familiar?

If so and you’re in the “shortfall” generation, what are you going to do about it? Can you do anything about it?

On Friday, my column was about a mom who successfully taught her son how to manage money by giving him a lump sum every month for sports equipment, school lunch, and clothes. If he blew it, then he’d have to borrow from the next month’s sum with interest. If he had some leftover, it was his to keep.

I received some great feedback from readers and thought I’d share some with you. Then please, share your stories about how you did or didn’t learn about money or how you plan to teach your kids.

I realized just the other day at how young an age kids start noticing cues about money when I remarked to my three-year-old that a dish towel at a gift store was pretty. Her response: “but you don’t need a dish towel, you have one at home.”

Sharon had her son get a fast food job and open a checking account at 14. But the responsibility didn’t end there.

On cell phones:When he wanted a cell phone we agreed to add him to our account but he had to pay for the phone and the monthly charge it was adding to our account and any overages and text charges and downloads he may incur. Once he started dishing out some money for his portion of the bill, he became more responsible about using his phone.”

On saving for the future: We discussed how important it is to save for his future so with the help of our financial planner he set up an IRA account which automatically deducts $50.00 a month out of his savings account. It comes out to about a movie a week. He knows when the money is going to come out and makes sure it’s in his account so he won’t be over drafted. The first month was tough and we had to help him out but now he’s doing fine and he’s saving for his future.

On vacation: We planned a family vacation to Hawaii last year and left it up to him to bring his own spending money. To our surprise he started skipping movies, video game purchases and trips to fast food places and brought $500 with him! He kept track of his purchases and came home with money, even after treating us to a nice dinner.

On acceptance: He still grumbles about missing out on things because he has to work or is coming up short on paying his bills but he understands this is all part of growing up and he appreciates the things he has now more than ever because he knows how hard he has to work and how long he has to save to get the things he wants.

Tom had a paper route as a boy and worries he would have blown the money if given a large sum.

I guess the BIGGEST lesson HERE if that if you want to empower your children to SUCCEED you have to make yourself heartless to let them fail too, like the real world does. A parent who offers a learning game and gives-in can easily teach the wrong lesson.

Matt responded this way: “I tried to set this up with my kid and he securitized all the future payments until he turns 18. Darn kid has a nicer car than me now.”

Finally, here’s Tori’s plea:

When my son was 16 I got him a credit card, which was paid off in full each time he used it. When he graduated from college (paid with cash so no student loans) he got a full-time job and immediately signed up for the 401K plan offered through work.

His dad and I told him he could live at home rent free if I could take his paycheck and give him a bit to use each month and deposit the rest to buy a house. I knew from my job in real estate that I wanted to see him with a fixed rate mortgage: no ARMS or interest only loans.

Two months ago at age 22 he closed on his home. One of my housewarming gifts to him was a paper shredder to get rid of all those credit card offers!

Parents, even if your financial situation isn’t the best, start working with your children early, and ask experts for advice if you don’t know what to do. After all, any good parent wants their children to have it better than they did!

I made my first investment when I was born.

O.K., Grandma Werner did. She bought me a savings bond of some sort. I can’t remember the duration or the letter. But I do remember feeling crazy rich when in my early twenties I cashed it and others out to do who knows what. I don’t even remember the amount that made me feel so flush, although some would have continued to appreciate if I’d only had some discipline.

During my teenage years, the Roth IRA didn’t exist. And if it had, I’m sure I wouldn’t have known about it, unless my parents told me about it.

When my daughter was a few months old, she had a modeling gig and made $185– not enough to open a Roth.

But imagine money compounding for 65 years or longer! That’s why the introduction of a 401(k) kids account in Congress is so cool.

Here’s a small item from Investment News:

The 401Kids Family Savings Act of 2007, introduced by Rep. Judy Biggert, R-Ill., would allow a yearly $2,000 after-tax contribution to the accounts but would allow interest to accumulate tax free. Qualified withdrawals also would be tax free.

The qualified withdrawals would include buying a house and funding education.

Coverdell Accounts, also known as education IRAs, would be renamed Kids 401(k)s.

For more details, visit Thomas and search for HR 87.
I love the idea of tax advantaged saving for kids.
But I wish folks would do a better job naming these savings plans. To me, 401(k) means workplace and tax-deferred. This name will just confuse people.

Until something like this makes it through Congress (and I wonder how likely it really is to be signed into law), how do you save for junior’s future?

Both of my kids have online saving accounts for their gift money and each has a bond from Great Grandma Werner. But neither has a 529 college savings plan yet because I haven’t maxed out my 401(k).

When they’re older, I plan to take most of the money we currently spend on day care and use that to max my retirement fund. Whatever is left I will use to fund a 529 plan.