Before you give your child an allowance, think about what you hope he learns from having one. An allowance refers to discretionary funds not earmarked for such items as lunch money or school activities. Keep in mind your child's age, and decide what chores he will need to do in order to receive his allowance: making the bed, doing the dishes, setting the table and keeping her room clean are popular standbys. Make sure your child understands that if the job isn't completed -- without constant parental prompting -- the allowance won't be paid.

A weekly allowance gives more opportunities to reinforce saving and budgeting activities. A general rule of thumb is 50 to 75 cents/week per year of age works out well (for example, a 6-year-old would receive .00 to .50/week). Obviously, the amount will depend on the parents' circumstances as well as the cost of living in a given area.