>> Sumi Das: Ross and Michelle Meador are the parents of 3 happy kids. They have a 12, 9 and 6 year old. Like many Americans, the Meadors would like to teach their children about money at an early age, but they're off to a slow start.
>> Ross Meador: We're pretty disorganized when it comes to allowance. We've talked in the past about giving the kids a regular allowance and I think we like that idea but we haven't actually implemented it.
>> Sumi Das: The Meadors also have some differing views about money.
>> Michelle Meador: He and I practically disagree all the time.
Laughter We do have a different philosophy I guess.
>> Ross Meador: I think advice would be a great thing for us.
>> Rona Renner: Children are bombarded with messages that they should buy things and have things.
>> Sumi Das: Moneywatch.com called on Rona Renner, an expert on parenting issues and the host of the radio show "Childhood Matters."
>> Rona Renner: And now if they have something they really, really want...
>> Sumi Das: She believes giving kids an allowance can help them learn the value of money early in life.
>> Rona Renner: We're teaching children about money management. So they're learning that if they want something, they can save for it. They're learning that it might take a little while and they're learning not to spend beyond their means.
>> Sumi Das: She adds, while there is no right or wrong when it comes to an allowance, she does have some practical advice for the Meadors. She says first, they need to get organized.
>> Rona Renner: Well if the family wants to do an allowance and they don't know how to start, one way is to talk about how much they think each child should get. And each child doesn't have to have the same amount. I would base it more on age.
>> Sumi Das: For example, for Leah - the Meadors 9 year old - she can start with 9 dollars a week. And with Amy - their 12 year old - they should try 12 dollars a week. As they get older, they can add a dollar to their weekly allowance for every year of age. The Meadors also need to work on being more consistent.
>> Rona Renner: Hash it out before you impose a system because otherwise what's going to happen is the kids are going to work you, they'll go to one parent and ask for a little more and the other one will say no. So see if you can be on the same page.
Background voices
>> Sumi Das: Daniel and Lolla Ortega would also like to teach money management to their 6 year old son Sergei.
>> Sergei Ortega: That wasn't me: that was you.
>> Daniel Ortega: Allowance is tied to responsibility. So as long as you pull your own weight, you get an allowance. It's that simple.
>> Sumi Das: They give Sergei 5 dollars a week for various chores.
>> Daniel Ortega: Don't move the bowl: okay.
>> Sumi Das: Whether it's feeding his pet birds or cleaning up his room.
>> Sergei Ortega: You let me be.
>> Sumi Das: They also give their son extra incentive to read a challenging book or perform some chin-ups with dad.
>> Daniel Ortega: There you go. Good job.
>> Sergei Ortega: Thanks.
>> Daniel Ortega: You're welcome.
>> Lolla Ortega: He's learning how you know earn money and he knows that if he wants money, there is like really the sky is your limit. I'll see how tall you are.
>> Sumi Das: Half of what Sergei earns, he gets to buy things he wants. The other half goes into his savings and to a charity. The Ortegas seem to have it all figured out and are satisfied with their plan. But Rona has this advice for the Ortegas. She says it's good that they have a solid strategy.
>> Rona Renner: I think the Ortegas have taken it seriously that they want to teach their child about money. And I think having something clear and structured is a great thing.
>> Sumi Das: But she cautions them not to tie individual tasks to rewards.
>> Rona Renner: I believe that a child should do chores and do things around the house as part of their responsibility for being in a family. But it's not "You do this, how much you get. You do that, you get this amount." I think it's better for children to have an intrinsic sense of being part of the family, accomplishing goals...
>> Daniel Ortega:
Inaudible
>> Sergei Ortega: I don't think so.
>> Daniel Ortega: Try.
>> Sumi Das: Rona also has these 3 general tips for all families thinking about allowance issues. Don't put too much pressure on your kids.
>> Rona Renner: With so much going on financially now, parents are talking a lot about their money troubles and I think we should be careful not to burden children with the worries of adult worries. So let's not put too much on them and yet teach them skills that will make them good stewards in life.
>> Sumi Das: Giving to charity is a good idea, but let the child choose it.
>> Rona Renner: Not everyone has a child give money to charity as part of their allowance, but if you do it's a really nice way for children to realize that they may have more than others without putting too much pressure on them and that they can think about a charity they really like.
>> Sumi Das: And finally, don't forget to let kids be kids.
>> Rona Renner: Kids need to be kids and I think more and more kids are not being allowed to be kids. They're really growing up fast so let's just remember to let kids be kids.
>> Sumi Das: For Moneywatch.com, I'm Sumi Das.
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==== Transcribed by Automatic Sync Techologies ====
