Allowances are a great opportunity to teach children about money. That means that you don't send mixed messages and use allowance to bribe your kids to do their chores or punish them by taking it away when they don't. Chores should be kept separate from money management issues.

Why give kids an allowance?

Kids are constantly being targeted by clever marketers and tempted to spend money. From Saturday morning cartoons that are really disguised commercials, to slick ads on billboards, TV, internet and magazines, more than ever, kids need to get savvy about the realities of managing money in today's material world.

When do I start?

The best time to start giving an allowance is when you notice your child is able to understand the concept of money. For most that will be around grade one when schools include counting and making change as part of the classroom program.

Six tips for successful allowance:

1. Give an allowance regularly. Kids should be able to count on a steady income so they can be in a better position to learn how to budget.

2. Give them what you can afford. There are many schools of thought on how much allowance to give however, consider examining what you spend on them per month and then decide what part of that you can hand over. Discuss your plans with your child and be clear what you expect them to pay for. That way they can decide if they want to walk to school to save bus fare, buy that blouse or go to the movies.

3. Let them make their own mistakes. Be careful not to over control your child's spending. They'll soon discover that they will have to make choices between the things they want and the things they can afford.

4. Set up some rules. Set up ground rules for their allowance and let them know that some of their money should be set aside for saving (education and/or rainy days), sharing (birthday presents) and spending (choices of their own).

5. Don't give them advances. If your child has run out of money, learn to say no with respect. Allow them to feel the consequences of what it feels like and then help them to focus on what they need to do to resolve their shortfall.

6. Watch for changes in needs. As your child grows her money needs will change. Periodically take a pulse to see if the amount is still appropriate.

It's not easy for kids to understand money or to manage it wisely. However, it's a necessary skill that will take them through life. When parents can be there to mentor them through the ups and downs that will come as they are learning, their children will benefit.