Encourage Creativity and Discourage Lying
Your child is ready to have a lot of creativity fostered in him. Creativity can be fostered in many ways. There are various ways through which a child can be made to do things. One of them is to make the story telling or reading sessions interesting for them.
Tell a story to your child, and ask him to improvise on the existing theme. You can make him change the characters, or the ending. You can also ask him to change the basic premise keeping the same characters. Also, you can ask you child to add a new character or remove one from the existing.
Adding humor or suspense to the plot is also an innovative way to bring out your little one's creative edge upfront. Once you try these things on and off, your child will slowly develop an imaginative way of things, which will help him in the long run.