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PARENTS SHOULD HAVE SOME CONTROL OVER GIFTS OF MONEY GIVEN TO KIDS

Dear Dr. Tightwad - At birthday time my children get gifts of money and checks from grandparents and other relatives. Some of the amounts are substantial ($50).

When they were toddlers we used to put the money in the bank for them. Now they're old enough to have caught on, and they want to keep the money and spend it.Should we let them?

Answer - Like your children's perceptions, your system should change as the kids get older.

When Dr. T's children were pre-schoolers, they were allowed to keep any cash gift or check of less than $20. Above that amount, Mom and Dad had discretion over whether the money was spent or saved.

That rule still holds for the soon-to-be-6-year-old (who even now is sitting on the doorstep waiting for the mail carrier to deliver his birthday cards and the money therein).

But the rules have changed slightly for Dr. T's older son and daughter, who are approaching 12 and 10. Their annual birthday checks of $25 and $50 from each grandmother still go into the bank, but if the children want something special they may spend the money.

(Last year my son used his to buy a soccer jersey; my daughter elected to leave hers in the bank.)

Bear in mind the wishes of the gift-giver, who may want the child to buy something of his or her choice - or may specify that Mom spend at least part of the money on a new winter coat.

Kids should also tell the giver what they did with the money - and, of course, offer an appropriate thank-you.

Dear Dr. Tightwad - My son graduated from college last spring and finally got a job, but on his salary he's having a tough time making his student-loan payments.

Is there any way he can get help?

Answer - Most lenders will be happy to give him more flexible repayment terms.

For example, the Student Loan Marketing Association (Sallie Mae), which services 40 percent of all student loans, offers a 10-year graduated payment schedule that lets you make lower payments in the early years of the loan and higher payments later, as well as consolidation loans with terms as long as 30 years. (For more information, call Sallie Mae at 800-831-5626.)

Remember, though, that any program that stretches out your payments will end up costing more in interest - perhaps tens of thousands of dollars more.

So graduates would be wise to raise their payments as soon as they can afford to, lest they still be paying back loans when it comes time to put their own kids through college.