I can't believe we are sitting here and ready to start the school year already. How did the summer fly by?

There's a great opportunity you don't want to miss to start the education process a week earlier. Projections show that, in 2011, $39 billion will be spent on back-to-school shopping. Many families will whisk their child off to the store to buy-buy-buy, preparing their offspring with the things they "need" to get them going.

At what age should your child start participating financially in that process? Now!

I've heard many stories where parents have used this time of year to slip in a lesson on budgeting for their child. Try this:

1. Sit down with your child and start the dialogue like this: "This is a big year for you as, at age (fill in the blank), you get to start participating in sharing the family's money. And this year, we're going to start practicing with money by giving you some to buy the things you'll need for school. What do you think should be on that list?" Watch all the items roll off their tongue as they haven't heard the punch line -- that they'll need to help contribute money and that money is not a bottomless pit.

2. Next, ask them to rank all of those items (and maybe a few items you helped slip on that list) in order of importance. While they are putting together that priority list, ask them to write next to each item how much it costs. If there are any prices that you feel don't look correct, send them over to the computer to do a search to verify that their price is correct.

3. Now comes the challenging part. You are going to give them a budget for the total amount of money that you, as the parent(s), will be contributing. It should be less than the amount they'll "need" (you'll find that some of the items they don't really need, they just want). I would also suggest that you ask that they use their own money to pay for 20 percent of each purchase. You'll find that, all of the sudden, the order of importance of those needs starts to change and the desire to have the expensive brand-name items start to come in conflict with being able to fit everything into the budget.

4. Finally, tell them that you're giving them the full budget to use at their discretion and any money that they don't use, you'll let them keep -- provided they buy all the essentials on their list.

This is a fun way to get their minds working and a lesson that they'll carry with them the rest of their lives.

Tom Henske is a Westport resident and partner with Lenox Advisors. His "Money-Smart Kids" appears every other Wednesday. He can be reached at: thenske

@lenoxadvisors.com.