A: While some parents are philosophically opposed to providing their kids with a weekly or monthly allowance, it's a good way to help teach your children the value of money and the merits of saving. Allowances are a good springboard for teaching sound money habits. Many parents, however, have trouble determining what a fair allowance is.

Your child's allowance should be large enough to cover fixed expenses and still leave something to save or spend as your child chooses.

Preschoolers can begin to understand the value of money, so this may be an appropriate time to begin an allowance. Fifty cents to a dollar a week should be sufficient to start a small child planning his or her finances with your encouragement. A preschooler's allowance should be expected to cover only luxury items, such as candy and toys. It's important to remember, though, that giving too much money is just as bad as giving nothing at all.

As your child gets older, his or her expenses will grow-and so should the weekly allowance you provide. Grade-schoolers can begin to assume responsibilities for their own club dues, hobby materials, sports equipment, and friends' presents.

Some parents expect their child's allowance to cover necessary expenses such as food and clothing, while others prefer to continue to pay these separately so that the child will not be tempted to spend money earmarked for necessities on frivolous items.

In setting the allowance, you should take into account what your child's friends and classmates receive, but remember that there will always be a friend who gets that extra quarter you refuse your child. It's an age-old bargaining technique. A good rule of thumb is to pay your child an allowance equal to their age.

You can teach grade-schoolers the basics of earning and saving by paying them extra for special household tasks you ask them to perform. Payments for special chores should be kept separate from your child's regular allowance and regular chores.

Don't let it get to the point where your son or daughter expects to be paid for everything that he or she does around the house.