Allowances are an ideal way to teach youngsters to spend only what they can afford. Give them options: Let them purchase school lunches out of their allowance — or brown-bag it and pocket the difference. Impose a savings routine: Get your kids into the habit of immediately saving 10% of their allowance. Offer to match charitable donations or savings toward a major purchase. Charge interest: If your child runs short before allowance day, make sure she knows that borrowed money must be paid back with interest. Establish how much; explain how it adds up.

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