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1. When your child has reached the approximate age of 4 years, decide upon an appropriate allowance. For 4 and 5 year olds, I would suggest $2.00 - $3.00 each week. After that, I would give them $1.00 for each year of their age.

2. Determine several age appropriate chores for your child to perform each week to earn their allowance. Make a chart, and check off when they have completed these chores. Remember that children love to feel helpful in their households.

3. Take three jars and label them:
a) Spending b) Saving c) Giving

4. Explain to your child that you will be dividing their allowance into these three jars. Decide with them what percentage will go into each.

5. The Spending jar will be for your child's short term, inexpensive purchases, i.e. candy. This money should be used, to the extent possible, at the child's discretion.

6. The Saving jar will be for your child's long term purchases. Use this as a tool to teach your children about saving for things they really want. This will make it easier for you when they whine and beg for a new toy. Tell them how much they have in their Saving jar, and ask whether they want to use it towards that toy.

7. The Giving jar is for charity. Discuss different charities with your children, preferably charities that deal with children. Explain to your child how fortunate they are to be able to give to less fortunate children, and have them come with you when you donate the money. If possible, select a charity where your child can actually see the end recipients. This is a great way to teach your children that they can help make a difference.