Teaching Money Smarts

Perhaps it's a sign of the times, but I've managed to be a parent for nine years without giving allowances to my children. They've asked but haven't pursued it because like many kids, they really have more than they need. In our blended family, we have three elementary school kids and one middle schooler. When they have asked for things they want, it's been easier to suggest we add the item to their Wish List. This list is a good thing to keep handy for birthdays and holiday gift giving ideas.

In our family, as in most families, there are lots of daily tasks that have to be completed for the household to function: laundry, dishwasher loading, dumping the compost bin. The four children are expected to do chores around the house when we ask and not receive payment for tasks like cleaning their rooms and taking out the recyling.

We have found that setting up special household jobs are a good way for the kids to earn extra money. Setting up a savings account for each child has also been an incentive for them to save the money they earn or receive as gifts. But even our offer to match their deposited money in the accounts hasn't been much of a motivator for them to put money aside.

Do you give your children an allowance? How does it work? If you don't, why not? Do you have any advice for parents who haven't yet started an allowance system? I'd love to hear your thoughts on what works, what doesn't and your opinion on children and money matters.