It is critical that you coordinate your clothing.
I prefer comfortable and casual vs. stuffy and over-dressed. Layers, hats, and fun accessories are always a good idea. Please stay away from clothes that are too big, logos, white socks, sleeveless shirts and big bows as they can all be distracting. Don't forget to wear matching shoes. If this is a problem, you can always go barefoot (if weather allows it)!
For family portraits, a color palette of 3-4 coordinating colors is recommended. If you need help, paint swatches at your local hardware store is a great resource. Think about the style of your home and the type of colors you would like displayed in it.
From a mother to a mother, I have some advice. Do yourself a favor and choose your outfit first. Pick a flattering color and something you feel beautiful and comfortable in. Short dresses and high heels are not recommended if you have young children. Once you're completely thrilled with your outfit, it's easy to find coordinating clothes for your kids and spouse. So many times we pick our outfit last and then scramble to come up with something. I know it's hard to put ourselves first, but you'll be so happy you did in this case.
For women, I highly recommend applying more make-up than normal or even hiring a professional. Please don't forget lipstick to add a little color to your lips. Even if you don't normally wear make-up please consider it for your photo session.