‘90s FAMILY : On the Money : A weekly allowance shows kids that funds are finite. But more important, experts say, it teaches them how to spend and save responsibly.

Jeff Wright, 11, saved his allowance money for months and took care of the neighbor’s animals during vacations so that he could buy himself something that surprised his mother--a bedspread with a porpoise on it.

“He was really proud to buy the bedspread himself and always shows it to visitors,” says Patti Wright, 43, a single mom who lives in Rancho Santa Margarita. “Knowing he can buy things for himself really boosts his self-esteem.”

Jeff has received an allowance since he was 5. He started at $1 a week and is now up to $5, which he gets every Saturday. After putting away a small portion of his money for presents and charity, he can do what he wants with the rest.

“Besides buying worthwhile things like his bedspread, he will often give his money away to homeless people and children at school who have forgotten their lunch money,” she says.

Although Wright isn’t sure if having an allowance has made her son charitable, it has definitely brought other benefits.

“Teaching Jeff about money has taught him self-sufficiency,” she says. “He knows he can do just about anything, as long as a little planning and foresight goes into it. He has a healthy, balanced view of money and mature spending habits.”

Most experts agree that it’s best to teach children about money as early as possible, and that allowances are a good vehicle for doing so. Giving kids a small amount of their own disposable income weekly does a number of things, including showing them how to save and prioritize and that money is finite. An allowance also familiarizes kids with the adult concept of cash flow and makes it clear that they can’t have everything they want.

Financial experts often suggest starting children on an allowance about the age of 6 or a mature 5. At this age, they are just beginning to understand the concept of money.

How much allowance children receive depends on their age and how you expect them to spend the money.

“For a 6-year-old, $2 a week is probably enough; you can then add a dollar at each birthday,” says Victoria Collins, a partner in the Irvine firm Keller, Coad & Collins, a registered investment adviser for individuals.

She suggests thinking over the allowance amount before setting it.

“Too small an allowance will be inhibiting. The child will feel hopeless about ever saving enough to buy anything,” Collins says. “But too much of an allowance can be overwhelming.”

If you expect your child to use the allowance for certain expenses, tally up how much those expenses should be and then add additional discretionary money, Collins says.

Whether to have chores tied into an allowance is a point of contention among money experts and parents.

“I think children should get allowances for being part of the family, and they should do chores for the same reason,” Collins says. “When an allowance gets cut because a child doesn’t set the table, he sees the allowance as something he can’t count on and associates love with money. If a child is told the allowance is his for being part of the family, he’ll pitch in on chores.”

Debbie Kermath began giving her first-grade son a weekly allowance when he started going to school.

“I explained that the allowance is his reward for going to school, just like I get paid for going to work,” says the 36-year-old CPA, who does tax and financial planning at Satriano and Hilton Inc. in Brentwood. “With going to school and getting an allowance comes the responsibility of doing his homework.”

She has tied her son’s chores to rewards such as playing Nintendo and watching TV.

Kermath gives her son $1 a week, which he can spend as he wants, as long as he gives 10 cents at Sunday School. She knows the amount isn’t much, but says it’s the principles she’s trying to teach that count.

“The underlying concepts--such as giving, making choices and delayed gratification--are more important than the actual physical money, although at some point it all needs to be translated into money, because that’s how the world works,” she says.

Some parents, however, believe that kids shouldn’t get money for nothing. Marr Leisure, 40, of Irvine, doesn’t give his son, John, 11, an allowance, but he does pay him for doing chores.

“I have found that by paying my son for chores, he has become very responsible about money and knows how to plan ahead,” says Leisure, an investment adviser. “He usually saves his money and buys something worthwhile of his own choosing.”

The fifth-grader says he likes getting paid for chores.

“It’s more fun to work for my money,” John says. “I feel like I’ve accomplished something.”

John says he makes about $5 a week doing jobs around the house, such as washing the dishes, cleaning the garage, raking leaves and feeding the dog. For his last birthday, he combined his savings of $100 and gift money to buy himself a telescope.

Just recently, with the help of his dad, John began investing his money. After reading company annual reports, he bought one mutual fund and is considering buying some stock.

“At first I thought buying stock was a grown-up thing, but then my dad explained it to me. I looked stock prices up on the computer and in the paper, and it got interesting,” he says.

Giving an allowance also enables parents to teach their children about saving money, says Don Silver, author of the book “Baby Boomer Retirement” (Adams-Hall Publishing, 1994). He suggests encouraging the concept of saving by making matching contributions to what children save.

“It’s best to match contributions when the child has a purchase in mind,” he says. “Then why the money is being saved becomes real and concrete to the child.”

For John, the concept of saving has become second nature, and he even has advice for other youngsters.

“Save your money until it gets to a bigger amount, and then you can buy better things,” he says.

He also advises kids to save pocket change their parents give them. “You don’t realize how much it adds up,” he says. “In one year I saved $200--$50 in just pennies.”

Kathryn Kert Green, 42, encourages her children to save by having them contribute a portion of their allowances to the family’s Tzedakah box. The term Tzedakah is Jewish and means justice . Money put into this box is to be used toward something that will repair the world and right what is wrong.

Kert Green began giving her two boys allowances when each was 6. Her older son, who just turned 11, gets $5 a week and her 9-year-old gets $3. Her 5-year-old daughter doesn’t get an allowance yet.

“Giving kids an allowance is one of the first steps toward teaching them how to save and be financially independent,” says Kert Green, who lives in Santa Monica. “They learn that careful decisions must be made about money and that if they spend all their allowance, they have to wait until next week for more.”