Unspoil your kids and teach them the most important values—determination, grit, generosity, gratitude, and more—by changing the way you do allowance at home. Too many parents are doing allowance all wrong. Chances are, you don’t give enough, you start too late, and you link it to the wrong stuff. Get allowance right and you have a powerful teaching tool...about money and character.

Ron Lieber, father and finance columnist for The New York Times, makes a case for “raising kids who are grounded, generous, and smart about money” in his latest book, The Opposite of Spoiled. One of the best (and easiest to implement) ideas he offers is to reevaluate how to do allowance for your kids. With the right approach, you can teach your kids what they need to know about how to save, spend, and give money. Even better, you can help them learn how to delay gratification (an elusive trait in today’s world, for both kids and adults).

Below, see five of Lieber's proven strategies for making allowance really count for kids. Put them together and your entire family will benefit.

1. Don’t make money talk taboo.
Many parents feel uncomfortable when it comes to talking to their kids about money: what they make, what they can afford, what they can’t, and why. These can be tricky questions to navigate, but Lieber advises that it’s good parenting practice being up front with your kids about money. Kids are naturally curious, and as with most things, it’s better for them to get their information from you than from friends or internet searches. Try to understand why they are asking you about money (are they worried about something or just looking for a framework?) and frame your answer in simple but honest terms.

2. Give allowance early.
Parents often wonder about the right time to start giving allowance to their children. Lieber suggests starting as early as possible, highlighting that when a child loses his or her first tooth (and the toothfairy may pay a visit) is a great time to begin. Ideally, you want to start building that bank and establishing healthy habits as kids start to demonstrate curiosity about how money works.

3. Give more than you think you should.
Don’t skimp on allowance! For the lessons of allowance (and how to spend and save) to work well, it has to feel meaningful to kids. Lieber suggests starting with a dollar per age of the child, with the caveat that it should go up (“way up”) once kids are about 10. Lieber also advises dividing up the allowance between three buckets (or jars, or whatever vessels you like): save, spend, give, to parallel an adult budget as much as possible.

4. Let kids make money mistakes.
Once kids are old enough (think tween years), start giving them full latitude with how they spend their money. You may even want to give them a clothing budget in the summer with some guidelines about how you usually tackle back-to-school spending and let them have at it. Lieber acknowledges that children will make mistakes with spending and advises that we should let them feel the consequences (spent too much on that jacket? you’ll have to reevaluate other “must have” items). “Better now than at 24,” Lieber counsels. “When errors lead to wrecked credit scores and worse.”

5. Don’t link allowance to household chores.
Lieber strongly advises against making allowance contingent upon completing chores around the house, observing that kids and teenagers generally value certain privileges more than money (screen time, car keys, nights out with friends) and it is better to take one of these away when they aren’t pulling their weight at home. Save “working for a wage,” he says, for teenage years, “when they have a real boss who will fire them for being late or copping an attitude.”

Learn More About Ron Lieber
We all want our children to grow up with a healthy and balanced relationship with money. Lieber’s no-nonsense approach can put us all on the right path. To learn more about raising fiscally responsible kids, read Lieber’s book and check out his website.