A lot can be taught and explained to children by understanding their psychology. Children love fantasy. They are intrigued by stories of the birds, bees, animals and nature. They often imagine the world around them through the lens of the stories told to them. Earlier, the elders often told bedtime stories to the children about fairies and fictional characters to impart knowledge to them and teach them life lessons. According to psychology, children remember well about things that they read or hear just before going to bed. It is because at this time memory traces are formed easily in brain. Today, in the era of video games, computers and the Internet, children's literature - especially stories written in mother tongue, have lost its significance. I believe, children should get into the habit of reading stories from an early age. Stories play an important part in psychological development of children. Stories develop imagination in children and also impart knowledge. Stories read in mother tongue develop curiosity, imagination, understanding and creativity in children. It also helps in developing a stronger grip on language. Fantasies and stories with happy ending with life lessons impart knowledge and help inculcate positive outlook in life. They also encourage positive behaviour in children.