Don't ignore the lying. Experience will reveal that the child will tell "bigger" stories if you do.
Try to discover what pressures may be causing the child to lie.
Use the "repetition" technique. Ask the child to repeat the remark you recognise as a lie. He or she will not usually repeat the lie once they suspect you know something
Do a rule check - too many rules and regulations may be forcing your child to lie.
Do a temper check - does your overreaction to wrongdoing encourage evasive and dishonest behaviour?
Set a good example. Never ask your children to lie for you ("Tell him I'm not home"). Admit your own mistakes and let your children see how you rectify them - for example, make a big deal of giving back the extra change you got at the cash till.
Counselling psychologist Dr Timothy Quek suggests giving your children a second chance to tell the truth. If you sense your child is embarking on a lie, you can say: "Stop. I really want the truth. Start again."
If you break a rule, you get a consequence. If you lie about it, you get another consequence. If a child is simply lying to avoid punishment, this policy can help motivate her to be truthful.
Christina Raley, editor of Momtomom.com, reminds parents never to ask a child a question that invites him to lie. If your child is caught red handed, don't ask if he is to blame. It is better to acknowledge the obvious calmly followed by statements of fact - "I see you broke the rules. I'm not happy about this. Now go to your room".
If you suspect your child may be lying because he feels inadequate or that he isn't meeting your expectations, work on boosting his self-esteem.