Today we continue our series on raising children to live graciously and well with a post about learning how to manage money.

Many children learn how to manage money because they receive a weekly allowance — often supplemented by birthday and Christmas money. In fact, a weekly allowance is a great tool for that purpose.

First, let me address some common questions. No – an allowance is not pay for doing your chores. Every member of a family does chores because doing your fair share is part of living in a community. You clean your room and set the table not because you get $5 a week, but because you live there and people who live together are responsible for contributing to the common good. So, I'm not a huge fan of withholding the allowance if chores aren't done. On the other hand, a system of fines is an acceptable consequence.

There are tons of suggested guidelines for how much you should give a child as an allowance. The one I see most often is $1 per year of life per week. So a 5 year-old would receive $5 a week. That's a guideline. What you give will depend on your financial ability, your family values, and what's expected to come out of that allowance. For example, if your high school age child is expected to pay for school lunch out of her allowance, $15 a week isn't going to cut it.

Each child should be expected to divide each week's allowance into three "pots." How much goes into each pot is a decision you should make with each child. The first pot is charity. This can include church contributions, donations to important causes, and the like. The second pot is savings. At least some part of EVERY week's allowance should be saved. These savings can be further divided into short-term, mid-term, and long-term. Short-term savings may be saving for a few weeks to see a movie or buy a new game. Mid-term savings might include a souvenir fund for vacation or family Christmas gifts. Long-term savings could range from a new bike to college savings. (And why shouldn't a child save for his own college expenses? The third pot is money to spend now. This will likely be the child's favorite pot — the one into which they want to put all of their money. the same three pots can be used for birthday money, babysitting money, etc.

Helping a child manage finances is a delicate balance between control and letting go. If your son wants to spend all of his "spend now" money on a video game, that's his choice — provided the game is age and value appropriate based on your family's standards. Of course, when his friends want to go to the movies and he doesn't have the money, he needs to live with that consequence — no bailing him out or letting him dip into savings "just this once." If your daughter wants to give money to a charity she saw on tv, that's her choice — but you can help her research how the charity uses donor money and how much of it actually gets to those adorable, sad little puppies.

At least at first, you may want to hold onto the savings pot. As children show their skill in managing money and delaying gratification, they can gradually take control of all but the long-term savings. You may want to check with your bank or credit union to see if they offer a "young savers" account. These accounts are usually fee-free and help young people learn more about saving and the beauty of compound interest.

The one thing your child is unlikely to need is a credit card. Even "just for emergencies." In most emergencies, there will likely be an adult nearby or reachable. In cases where that isn't true, money is unlikely to solve the problem.

At least once a year, or maybe even quarterly, it's a good idea to have a money review meeting. Take a look at the percentages in each pot and see if you can add more to charity or savings. Look at how savings are growing and talk about your dreams for using that money. Maybe even chart how close you are to a savings goal. Seeing progress is very encouraging.

How did you learn how to use money?