When it comes to children’s allowances, many parents struggle with which approach to take. Some link allowances to completion of chores; others feel they shouldn’t be tied to completing tasks, but rather, be an opportunity for kids to begin to learn money-management skills that will serve them later in life.



My wife and I agree with the philosophy espoused by Kristan Leatherman, co-author of “Millionaire Babies or Bankrupt Brats,” a guide for parents to teach personal and financial responsibility (www.raisingmillionairebabies.com). Leatherman says children should be responsible for certain age-appropriate chores designed to teach responsible behavior by becoming contributing household members – with allowance falling outside that equation.



Leatherman believes that separating allowance from chores “allows” your kids to experiment with money, to make mistakes and learn from them in a safe environment, and to make their own earning, saving, borrowing and spending decisions. She notes, “Why wait until our children are forced to learn about personal responsibility and money the hard way? Why miss those opportunities when the lessons are easier to learn on a daily basis and the price tags for mistakes are so much more affordable?”



As an example, we give our 9-year-old son a weekly allowance, and he can do additional chores, like washing the car, to earn extra spending money. He also knows that he must give back 10 percent to charity, since that’s an important value of ours. Our 5-year-old daughter will soon be ready to jump into the allowance pool, but in the meantime she has her chores as well.



Wherever you fall on the allowance spectrum, here are several factors to consider:



What can you afford? Most younger kids don’t really understand where your money comes ...