Nearly 20 years ago, Sandra Rubin became a single parent with very little money and three preschool children to support. As her children grew, money matters were discussed openly in the family.
''Being a single parent, my children participated in many household decisions involving money such as shopping and banking,'' says Mrs. Rubin, whose three children are now in college.
''At the time, I worried it was too much responsibility for them. But now they tell me it has been extremely helpful and has helped them deal with many everyday money affairs their contemporaries know nothing about.''
The ability to understand and handle money is a necessary skill children can begin to learn at an early age.
''Many parents are concerned their children will reach adulthood and have few money-management skills,'' says Audrey Guthrie, a specialist in consumer education and family management at West Virginia University. ''We teach children how to earn money but not how to manage it.''
In a series of eight pamphlets published in cooperation with the United States Department of Agriculture, Ms. Guthrie outlines some basic principles parents can use to teach money management to their children. The topics include using allowances as learning tools, spending and saving, and shopping techniques.
''Children need money in order to learn how to manage it,'' Ms. Guthrie says. ''An allowance is probably the simplest way to share income.''
Kitty Wolf of Norfolk, Va., a single mother with two children, aged 9 and 17, sees allowances as a regular part of the family budget.
''The children are part of the family and they deserve to have a part of the family income,'' she says. ''When there is no money available - like the time we had to get a new roof - there were no allowances. I didn't get anything extra and they didn't either. They can understand these things - they wanted a new roof, too. They have a part in making up the budget and have a say in where the money will go.''
When setting an amount for an allowance, Ms. Guthrie advises, parents should first decide what the allowance will cover - the cost of an ice cream cone or a movie - and how much they can afford to give. Children need to know what the amount will be, how long it must last, and what the money will cover.
When a child enters school, an allowance may be increased to include lunches, bus fare, or school supplies. The allowance should also include some money the child has total control over, Ms. Guthrie says. ''If we don't give them something extra they are just learning to disperse money, not how to make choices.''
Nine-year-old Jessica Hennelley of St. Louis gets an allowance of $1.25 a week from her parents and can earn up to $5 doing extra chores around the house. She usually saves her money for trips to a nearby shopping mall every couple of weeks and plans in advance what she will buy. ''I could live without an allowance - Mom does supply me with food and clothes,'' says Jessica. ''But she supplies me with the things I need, not with the things I want.''
Allowances can also be used to teach sharing. In the Rubin family, each child contributed about 5 percent of his allowance or money earned from a job to a fund for special family activities the everyday budget couldn't cover.
Some parents provide ways for their children to earn their spending money.
''We don't give allowances per se,'' says Carrie Semeyn of Barrington, R.I. Her four children, who all have regular chores, earn their spending money by doing extra jobs around the house for $2 an hour. Her 12-year-old son, Matt, earns about $5 a week and usually deposits some money in his savings account. ''It's nice to have savings when you want something like a bike,'' he says.
Another basic lesson in money management is teaching children how to shop, compare quality, and get the best value for their money.
''My children were allowed to pick their clothes since the time they were preschoolers,'' Mrs. Rubin says. She would give the child the allotted amount of money for clothing. Then, with some parental guidance, they were allowed to choose the clothes they needed within their price range.
''Sometimes the outfits were pretty awful, but as long as it served a purpose I could live with it,'' she says, laughing.
When the Rubin children reached their early teens they took over the grocery budgeting and learned comparison shopping. ''I think they really did enjoy it,'' their mother says. ''They were better shoppers than I was.''
But even children who are familiar with everyday finances can have unrealistic notions about money. Mrs. Rubin, who is currently a professor at Old Dominion University in Norfolk, Va., says that as young teen-agers her children thought her salary sounded like a great deal of money until she explained about hidden expenses such as taxes and car insurance.
Taking an outside job is another way children can learn about money matters.
Eleven-year-old Joseph Kessi of Belleview, Wash., has always worked for his spending money. ''I have a number of jobs,'' he says. Joseph baby-sits and does yard work, and runs a dock-cleaning business with two friends.
In some families, teens with jobs help finance or supplement college costs.
''We've encouraged our children to finance the extras themselves,'' says Dr. Katharine Kersey, author of ''Sensitive Parenting: From Infancy to Adulthood'' (Acropolis Books, Washington, D.C.), and the mother of three college-age children. Her son David, who has had jobs since he was 12, chose to finance his entire education himself.
''Children are more careful in their expenditures when the money is theirs,'' Mrs. Kersey says. ''They are also reluctant to ask for it, because they know how hard it is to come by.''