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"I didn't want to discourage her heart for giving, but that was a lot of money to give to another [5-year-old] little one," Hays recalled. "We had to have a talk with her about that."

Now that their daughter is older, Hays, 44, and her husband are still teaching her and their three other children lessons about money, now in the form of an allowance.

"We want to teach them responsibility," Hays says when asked why they give an allowance to their children.

John Van Bloem, 41, of Frederick agrees that allowances can teach responsibility. He and his wife give allowances to both their children "to give them opportunities to learn about making choices with it."

Marcia McKinley, an associate professor of psychology at Mount Saint Mary's University in Emmitsburg, says that there really are no downsides to giving children allowances.

"Giving an allowance, and letting kids make at least some of their own financial decisions, gives kids practice in managing money with small amounts before they are dealing with larger amounts of salaries and bills in adulthood," she said, adding that an allowance also teaches independence and the idea of delayed rewards.

But should parents require chores to be done in order for adolescents to get their allowance?

Timothy Gibian, a licensed psychologist at the Frederick Psychology Center, cautions against becoming a "family accountant," having to keep track of every chore completed and what it was worth. But he says that "money is a very powerful reinforcement for children ages 12 to 14."

"The idea that children should simply do chores because they should want to contribute and learn about working makes no sense," he says. "Adults would never go to their jobs if they weren't going to be paid."

Gibian says that children at this age are more self-focused, so if they don't see what is in it for them, they will be less motivated to do chores. In general, he believes parents should give their children "some allowance money for contributing to the family by being responsible, honest and so on."

McKinley says that most experts agree that children should do chores as a way to contribute to the household, but solely "tying allowances and chores together carries some risks."

"It may lead to increased parent-child conflict," she says. "For example, ‘if I take the dishes out of the dishwasher, can I have a dollar more?'"

She also says connecting the allowance to chores does not work if the adolescent does not really need or want the money or deems the chore too difficult and not worth a few dollars.

"It encourages kids to help out only for money, rather than to be cooperative and helpful, and it encourages the belief that people get paid for everything," she adds.

In the Hays household, the parents and children have struck a balance.

Hays' 14-year-old daughter is expected to empty the dishwasher, wash dinner dishes and clean her room and laundry in order to earn her allowance. But Hays says sometimes, if one of the kids does something more when not asked, it might earn them extra money as a reward.

"[But] there are things beyond we do not pay for. I think both are important. I don't want them to think they get paid for everything they do," she says.

Van Bloem says his 12-year-old son is expected to vacuum the downstairs, clean his room and empty the wastebaskets each week to earn his allowance. But he is required to do other chores such as "cutting the grass, emptying the dishwasher … really just about anything we ask of him, that isn't tied to his allowance," he said.

Van Bloem says that he and his wife have clearly stated expectations to their children that when help is needed, they all must pitch in.

Gibian and McKinley say it is important to talk to a child and set clear expectations about expenses he will now be responsible for, using his allowance.

"Don't dilute the motivating power of allowance by paying for everything that's requested," Gibian says. "Tell your son or daughter what they will have to pay for on their own."

McKinley says younger children will need to see a more frequent, or weekly, allowance to stay motivated, whereas an older child can budget on a monthly timeframe. But once an agreement is set, parents need to be on time and consistent with the amount. "Parents should model responsibility by giving the allowance regularly," she says.

Tips for parents

Have a serious discussion with the child and set clear expectations about what is expected of him or her to earn it.

Stress that an allowance is "an important part of being a teenager, but so is being part of a family and contributing to the family as a whole."

Set guidelines about what the child will now be responsible for buying on his own. Regarding more expensive items, parents should help children identify long-term goals and then devise a savings plan to help achieve these goals.

Think about the "Goldilocks standard" when setting the amount—not too much, not too little.

Set a payment schedule and stick to it.

Sources: Marcia McKinley of Mount Saint Mary's University; Timothy Gibian of the Frederick Psychology Center