Combs offers two suggestions for calculating the amount of the allowance -- $1 per month for every year the child is old, or $1 per month for every grade level. Godfrey recommends children begin receiving an allowance at three years of age. She defines an allowance as "money the parent gives a child each week as a payment for being a working member of the family." She adds that generally, the sum needs to be large enough so the child can do "all the money management exercises that will prepare her for the future. Be prepared: the 50 cents a week you got as a child won't enable your offspring to learn much about finance today!"

Sign a Contract
A "contract" can help parents teach children the interrelations of money and behavior.

Combs says that by following agreements he and his children have made in a written contract, he never has to say no to his children about money. "With a contract, they don't nickel and dime you to death, saying 'buy this, buy this, buy this' at the store, because they know where their finances stand."

When Combs prepares his contracts with his children, he has fun dramatizing the situation by asking, "Would you like your lawyer to be present?" He negotiates contracts with each of his 12 children individually, with both parents present. At a stationery store, he buys two copies of a legal contract for each child. He and his wife Tami, keep one, and the other is framed in the child's room.

He says each contract contains three mandatory elements:

1. A statement signed by both parent and child that they agree to the contract and all of its elements, including the stated amount of the child's allowance.
2. The list of job parents will pay the child to do each month to teach him the principles of work. Combs adds that these jobs can be anything from vacuuming to dish duty to cleaning the bathroom. He advises parents to inspect children's work before paying them in cash. (Money given for jobs is separate from allowance.)
3. Chores, or work the child is required to do as a member of the family, or, as Godfrey calls it, "a citizen of the home." These tasks are completed without payment. Combs says, "There are jobs the child does to help the family stay organized, clean and happy, and to help other family members.

Combs' contracts also include other optional elements, some of which he admits are highly controversial. He suggests parents might also want to consider these other ideas as possible contract elements.

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About the author: Carolyn Campbell is author of the books "Love Lost and Found" and "Together Again."