As they grow older, this lesson will show them the importance of community service. An allowance should teach your children how to make good money choices, by balancing their spending freedom with your financial guidance. Savings should be a part of an allowance- both long term for college, and short term for the more expensive items they want to buy. This will teach them responsible money handling. Plan regular family meetings to discuss the household budget and allowances.
Children pick up strange ideas about their family's financial situation.
On one hand, they see parents as all powerful with an endless supply of money. On the other, a small financial crisis that they overhear the grownups talking about can give them feelings of impending doom. A matter of fact discussion of how family finances are distributed can dispel misinformation. Involve your children in the family budget. Everyone should have input, but parents have the final say.