Liz Weston: Allowances Don't Teach Kids About Money - You Do

Cash is easiest, but much of what kids want to buy — downloads of a favorite show, a toy on Amazon, a realm in Minecraft — requires plastic.

(Money Savvy Pig and Moon Jar are two options.) We moved on to apps when more of her purchases moved online.

Along the way, she learned to make choices, delay gratification and save up for stuff she wanted, including a laptop.

Research indicates that parents' behavior — the example they set — and the discussions they have with their kids about money are much more important in shaping their future financial health.

Parents don't have to be money experts to talk about the importance of delayed gratification or the difference between wants and needs, says report researcher Elizabeth Odders-White, associate finance professor at the University of Wisconsin, Madison.

A recent T. Rowe Price survey found that when parents had at least three types of savings accounts — for example, an emergency fund, a college fund and a retirement account — their kids were:

By contrast, parents who had more than $5,000 in credit card debt were more likely to have kids who spent money as soon as they received it.

Chores certainly contribute to children's character development and future career success, according to various studies by Harvard University and the University of Minnesota .

[...] financial literacy expert Lewis Mandell has found in his own studies and reviews of others' research that kids who receive no-strings allowances knew much less than others about saving, spending and credit, and they had a worse work ethic .