Expand 'Tween Allowances And Set Guidelines on Spending

Ages 11-13: Parent Power

As you head into the difficult 'tween years, remember this: Parents have power. Despite media hype and peer pressure, kids will listen to you if you have a clear message and deliver it consistently. A young woman once told me that when she was a kid, her parents had a rule about holiday gifts: She and her siblings couldn't ask for something if they had seen it advertised on television. A bit extreme, I thought. But not only did the young woman and her older brother accept the rule, they also passed it on to their younger brother (misery loves company, perhaps?).

Now's the time to build on the foundation you laid when your children were younger. Expand their allowance money to include more discretionary purchases: video games, movie tickets, shopping excursions with their friends. My rule: Kids shouldn't hit you up for $20 every time they head to the mall. Having to chip in their own money puts a natural brake on spending, keeps them from bombarding you with requests for expensive stuff, and gives them a reason to save for their own iPod.

If you're an investor, introduce your kids to the stock market. They're old enough to understand that owning stock means being part owner -- and sharing in the profits -- of a company whose products or services they use. (In response to numerous questions I get from readers, investors can make small purchases of stock through ShareBuilder.com, with commissions as low as $4, and MyStockDirect.com, which links to more than 100 companies that sell stock directly to the public.)

Next week: Ages 14-15