Several years ago, I wrote a book called Clark Smart Parent, Clark Smart Kids in which I discussed the art of giving an allowance. And it is an art, definitely not a science. Trying to figure out how best to use an allowance to give kids a sense of responsibility and motivation is a challenge that nobody has the right answer to, only opinions.

I have a bias toward allowance as a paycheck that is earned for doing chores. The typical allowance for a kid is now $15 a week, though it's nowhere near that in my house.

My thing is around age 5, when a kid is old enough to understand, you can consider an allowance. I have given my kids a dollar a week according to their grade level as long as they complete their chores. The chores are detailed for them on a chore wheel so everybody knows what they've got to take care of.

But you have to find what fits your kid. I met with someone recently who was designing a high school curriculum about personal finance. That made me think about talking with my 12 year old about what things cost, including a car payment, a home payment and taxes. The thing is, it has to be an ongoing dialogue.

For younger kids, I love the three jars concept that came out of the Christian fundamentalist movement. Each jar is marked with a red, green or yellow heart. One jar can be used to hold money for charity; another jar holds money for current spending; and the third has money for longer-term savings. This provides a very simple, clear and tangible lesson for children.

It is my belief that an allowance up to age 16 is more about discipline and responsibility with a kid than it is about teaching the value of a dollar. The point at which you can teach a kid about the value of money is as a junior or senior in high school.

As for Clark Smart Parent, Clark Smart Kids, you can find my book ultra-cheap used or get a signed copy at ClarkHowardStore.com.

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to save more, spend less and avoid getting ripped off. View More Articles

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