Mandell still likes allowances as a teaching tool — provided parents structure them correctly. "If you give an allowance, give it with some expectations. It should not be just an entitlement," he says.

Many financial professionals encourage parents to give allowances, and all have their own ideas on the best way to dish them out.

Neale Godfrey, founder of the Children's Financial Network, which promotes financial literacy, says there are many variables that might explain why children who don't get allowances performed better on the Jump$tart literacy test. But she says allowances — with chores — work. That's what Godfrey, 60, received as a child.

All children should be required to do certain household tasks unpaid, she says. But kids then can earn money by taking on extra tasks, such as vacuuming or the laundry.

"The consequences of not doing your chores: You don't get paid," Godfrey says. Just like the real work world, she says.

Godfrey recommends that children put 10 percent of the money away for charity and divided the rest into thirds. She says a third should go toward immediate spending, while another third is set aside for medium-term goals, such as an iPad. The final third should go toward long-term objectives, such as college or a car.

Janet Bodnar, author of "Raising Money Smart Kids," likes allowances, too.

"I wish I had gotten an allowance," the 62-year-old says. "I would have learned to manage money sooner."

Bodnar advises not to tie allowances to household chores that kids should do anyway, such as keeping their rooms clean.

Allowances, though, should come with financial responsibilities based on the child's age, she says. For example, young children could be responsible for buying their own small toys, Bodnar says, while middle-school students might be required to pay their own way at the movies. Teens could be responsible for paying for gas or their cellphones.

This is much easier for parents, she says, than having to track whether kids did their chores and deserve to be paid.

Brad Klontz, a psychologist and associate research professor at Kansas State University's Institute of Personal Financial Planning, says kids should have responsibilities around the house — but that their allowances shouldn't be tied to these chores.

"It gives a message that 'Unless I get paid for it, I'm not doing it,'" he says. And that, he says, leads to family arguments.

"Allowances for most parents are a missed opportunity," Klontz adds.

Klontz suggests parents set up rules on what children can do with their money. For example, he suggests, one-third could be set aside for spending, another third for saving and the rest for charity. It's similar to the allowance structure he grew up with, although the 40-year-old Klontz says he didn't have a savings component.

(Full disclosure: I didn't get an allowance, and I think it made me less of a spender.)

All these different approaches can be confusing to parents who want to raise money-savvy kids.

But there is one common denominator in all these views. Each requires regular parental involvement, whether talking to children on why they need money, if they've done their chores or what to do with their cash.

So whatever tack you take with children, make sure you have ongoing conversations about finances. That's how they will learn.

eileen.ambrose@baltsun.com

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