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Money-smart kids: Dear Sasha and Malia ...

By Janet Bodnar

Kiplinger's Money Power

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Can we talk about your allowance? I understand that each of you gets $1 a week. If you think that's a little low, I'd have to agree with you.

To their credit, your parents probably don't want to spoil you. But sometimes it's just as bad to get too little as it is to get too much. And even in a recession (your father knows that word well), the cost of living for a 7-year-old and a 10-year-old is more than $1 a week.

I would recommend that you get weekly allowances equal to half your age -- that's $3.50 for Sasha and $5 for Malia. In return, I'd expect you to take on extra responsibilities. For example, your parents might ask you to pay for your own tickets or popcorn when you go to the movies. Or you could buy treats and toys for the new puppy your parents promised you.

You wouldn't have to spend all your money at once -- you could save up for something special. Your parents might even ask you to save 10 percent of your allowance every week (doing the math will help you learn percentages). Put the money in a piggy bank and watch it grow. And when you have enough, your parents could help you open your own savings accounts in a real bank -- one that won't go out of business. (Note to Dad: Think of the boost in confidence it would give the banking system.)

I read that you're expected to make your beds but that your mom is satisfied if you "just throw a sheet over them." Sounds easy enough. I don't think you should get paid for doing such chores. Kids should pitch in because their parents need help around the house -- even when it's the White House. If you'd like to earn more money, you can always get paid for doing jobs that Mom and Dad consider extra.

One problem you seem to have is that your dad sometimes forgets to give you your allowance. No surprise. All parents are forgetful at one time or another. What you need is a simple system for reminding him.

Maybe he could program it into his BlackBerry. Or maybe you can set aside a certain time and place -- say, every Sunday night in the Lincoln bedroom. One family I know made a booklet of construction-paper coupons that the kids could tear off and exchange for their allowance each week.

Why am I telling you all this? Because you could set an example for other kids on to how to divvy up allowance money and make wise choices about spending it. You could learn to be patient and save your money for something you want. You could use your own money to buy things instead of someone else's.

In short, you could take on more personal responsibility -- something your father talked about in his inaugural address. If more grown-ups had done those things, we wouldn't be faced with such a big mess to clean up.

Janet Bodnar is editor of Kiplinger's Personal Finance magazine and the author of "Raising Money Smart Kids" (Kaplan, $17.95) and "Money Smart Women" (Kaplan, $15.95). Send your questions and comments to moneypower@kiplinger.com.