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New Rules for Your Kid's Allowance

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Maybe it's just me, but I get pretty sad around this time of year.

Of course, if I really thought about it, I should be celebrating: In just 24 hours and 7 minutes, my three kids will be heading back to school (but who's counting?).

This will allow me the gift of time -- a chance to get some work done without someone asking, "Hey, mom, can we have Thai for lunch?" or "Can we go shopping for winter boots?" even though it's 95 degrees outside.

But I don't rejoice. In fact, the idea of back-to-school makes me cringe with each TV commercial touting sales on backpacks, laptops, and the coolest new clothes.

And because there's nothing my husband and I loathe more than the dreaded, nightly nagging sessions, where we tell our kids to "Go to bed!" 100 times so that they get enough sleep.

But I'd like to believe that I'm sad because I'm really an empathetic kind of mom.

No matter the reason, I find that the end of summer means I'm also on guard for the "big asks." Back-to-school can signal a time for kids to start some hardcore negotiations on everything from lunch money, to allowance, to compensation for chores... it's all on the table, and the kids are ready to cash in.

But before you step into some back-alley bargaining you are bound to regret, here are three new rules about your kids' money.

Keep the Allowance Real

A study just released by the American Institute of CPAs (AICPA) found that the average allowance nationwide for kids up to age 25 is $65 a month. That's about $800 per year!

The survey doesn't say, however, whether the kids using that money are expected to pay for their lunches and social activities -- or whether that money is pure gravy, and you're covering the essentials. So while that sounds like a ton of cash, it may not be.

The old rule of thumb is: Give your kid $1 per week for each year he is old. But that may be wildly high or low, depending on your current circumstances as well as the habits of your kids' friends.

Although I'm not big on trying to keep up with the Joneses, I do think that it's smart to ask parents you like and trust -- who have kids you like and trust -- how much allowance their kids get.

Establish from the start what the money is for. You may be giving your kids $10 a week, but find yourself forking over hundreds more. For instance, when my daughter was 10, we wanted to go with an amount that sounded prudent, but it didn't include enough to buy her friends' birthday gifts.

So, unless we were willing to allow her to miss the parties since she couldn't pay for the present, we had to give her much more than we originally thought.

It's Fine to Set Limits with "Their" Money

I was the last holdout in the hood when it came to Game Boys, cell phones and laptops. The longer I could keep a paper book in my kids' hands, the better. So when we started giving our kids allowance, they started saying they were saving up for... you guessed it... electronics.

At first, we were unsure how to handle it. After all, isn't the point of giving allowance about teaching responsibility? If it's "their" money, shouldn't they be rewarded for saving by being able to buy what they want? Er... no.

We wouldn't allow our kids to buy endless amounts of tooth-rotting candy, would we?

It's fine to say certain items are off limits (for us that meant mini dresses that are more similar to tube tops than skirts, toys with dangerous parts, and violent video games) but we also try to avoid saying no to everything.

Barbie doll? No problem. Music with lyrics that would make Cole Porter cry? It depends.

It's okay to have rules and stick with them, and it's also important to choose your own parenting battles. PG-13 movie for my 10-year-old? Maybe, depending on the content.

I have a friend who finally let her six-year-old buy a toy gun since he was turning everything -- sticks, his morning toast, his sister's pacifier -- into a gun anyway.

Make Savings a Must

One of the most chilling aspects of the AICPA survey for me as a personal finance writer was that an astounding 99 percent of parents say their kids aren't saving a single penny.

Unless these kids have kids of their own, are supporting grandma and paying her hospital bills, or are paying for college themselves, there is no reason that they can't sock away 25 percent or more of their income.

From the time kids are young, teach them to save a dime for every dollar they earn. This will instill the savings habit from an early age.

For more money tips for kids, check out MoneyAsYouGrow.org, an interactive site endorsed by the White House that I helped create as a member of the President's Advisory Council on Financial Capability.

Beth Kobliner is a personal finance commentator and journalist, the author of the New York Times bestseller Get a Financial Life: Personal Finance in Your Twenties and Thirties, and a member of the President's Advisory Council on Financial Capability. Visit her at bethkobliner.com, follow her on Twitter, and like her on Facebook.

This post was originally published on Mint.com.