Imagine you are ready to play Monopoly with your children. All the motels and hotels are out of the box, the board is set up and everyone has selected their playing piece. Now all you need is the money, but it's nowhere to be seen! How much fun would you have playing Monopoly without the money? You could try to explain how the game works, and you might even write down each player's bank balance on a score sheet. But it just wouldn't be the same, and I think your children would lose interest pretty quickly.

That's what it's like trying to explain how money works without using real money. How would you teach your kids to tithe, to save, to spend wisely, and how taxes work? How would you explain money to them?

The purpose of allowance is to give your children learning experiences with small amounts of money, so they're prepared for the later years, when higher dollar amounts come into play. Allowance is a tool that, when used wisely, will pave the way for your children to experience God's best throughout their life when it comes to money matters.

Money in their hand gives you opportunities to teach them the attributes and characteristics that I mention in Dad Cents—how to be shrewd, faithful, trustworthy, efficient, effective, accountable, generous, and so on. These can be taught without using money, but your children would do well to learn how they all relate to money.

"Should allowance be connected to chores and tasks?" is a common question parents have about allowance, and often the starting point for this decision is based on what their parents did when they were kids. Did you get an allowance because you had chores to fulfill, or did you receive it just because you were a part of the family? Let's look at both sides.

Attaching allowance to household chores is a popular idea for many parents. They want their children to start learning about how the real world works: an honest wage for an honest day's work. Kids need to learn that money is earned by working, and we hope they learn to work hard and do their best.

Going with this approach, parents might make a list of chores and attach a value to each chore. At the end of the week, they add up the tasks the child has completed and the money associated with them, and that determines the allowance. The basis for this concept is that kids need to learn they earn money for working.

The other common approach is to keep chores and allowance separate. Helping with household chores is expected as part of being a member of the family. Allowance, too, is part of being in the family, and it's viewed more as a tool for teaching children about stewardship. Proponents of this approach believe that kids need to learn that they will always be responsible for certain tasks in life, and they won't be paid for them. Making their bed or helping with dishes are good examples. In adulthood, those are tasks they will need to do, but it's very unlikely that they'll be paid for them.

When I was growing up, my parents actually used both systems. But in our family today, we use the second approach, and that's what I recommend. Although kids need to learn that there are rewards for work, I believe there is plenty of time for them to learn that when they are old enough to work outside the home.

Also, I see multiple problems with attaching allowance to chores. Remember, allowance is a tool to help you teach your children about managing money. What if kids consistently forget to do their chores, or decide that they would rather not work and not have an allowance? When they get older, maybe they will have enough money for what they want, and decide to skip the chores. And how will they get in a predictable routine if the amount of their allowance changes from week to week? To me, these factors can easily become road blocks to the kids learning about money, which is the main goal.

And for you, keeping records of what they have completed and what they are owed could become a huge headache. If a chore comes along that isn't on the list, you'll have to negotiate a price for getting the kids to help with it. Allowance could quickly become a major source of conflict instead of a learning tool.