Money's an integral part of our lives, yet it can be a hard subject to talk about. But it's something kids can learn about from an early age.

For my youngest son James, who starts kindy next year, the concept of money is a work in progress. Money comes out of the ATM but how it gets there hasn't registered yet. He gets a small amount of pocket money, about 50 cents a week. It doesn't last very long as he usually buys a sweet or toy with it at the supermarket.

His siblings Hamish, eight, and Lucia, 10, have a very different relationship with money. They have a clearer understanding of its value and that it's earned. I've been giving them pocket money every week for a few years now.

When I first introduced it, I linked it to a daily jobs chart. They accrue a certain amount a day, paid at the end of the week if the jobs are completed willingly. It saves a bit of nagging from my end and gives them incentive for tasks.

Establish goals to aim for

Most parents give pocket money to help their kids manage money. Pocket money introduces them to the basics of budgeting so they learn to identify savings goals and develop the patience to achieve them. Even small amounts provide them with a feeling of independence.

How much is right?

How much pocket money and when to give it depends very much on family circumstances and budgets. If you decide to go with a weekly allowance, relate it to your own situation rather than being influenced by others. But be consistent between the siblings.

If there are a few kids to consider and not much to spare, try to avoid locking yourself in. Be flexible and renegotiate the amount every year.

Money for something

Opinions are divided when it comes to linking pocket money to chores. There's merit in the concept that the self-esteem and responsibility of contributing to the household is motivation enough and should need no reward. There's also value in giving children a basic amount of money each week with a chance to earn additional income for extra jobs. But it's subjective and each family must find what works for them.

Involve kids in finances

Other ways to teach kids about money include involving them in discussions about family finances (obviously don't burden them with financial woes!). Explain how you set goals and save for a holiday, new bike or pool. Let them see you pay for items at the shop and explain what $5 buys. Discuss budgets, expenses, wants and needs, and later on you can introduce the concepts of debt, investing and planning.