My kids are 9 and 5. We started an allowance for my older son when he was 6. My younger son somehow managed to get his allowance started at age 4! I think children should get a large enough allowance so that they can save for good-quality things, and not have to just buy soon-to-be-broken junk because that's all they can afford. I think the allowance should be tied to positive behavior and helpfulness.
The fact that they can buy, or save up for, their own nice toys means that when I take them to the store, I feel fine with saying "use your own money" if they want something. I don't give in to their every whim.
I have found that my children will beg desperately for a toy if they think I might buy it for them, but once I tell them that they must use their own money, they suddenly stop wanting it. Also, both kids have saved money over a long period of time for expensive items such as those handheld video game things.
So at our house, my children get 50 cents per day for good behavior, and then they can do household chores in order to earn $6 per hour (if they work steadily and are actually helpful). Out of this, they must put $1 per week into a "charity" envelope, which they can give out whenever they want.
In terms of cleaning, our kids generally work with us to clean the kitchen or bathrooms or pick up clutter -- they are still too young to go and clean effectively on their own. And they do have to be persuaded to help. Sometimes my older son would rather be poor, than help out! Also, if they have made a big mess on their own, I don't pay them to clean it up -- they just have to clean up their own mess.
The charity aspect is nice. My older son has enjoyed donating his money when his school was raising money for hurricane victims. He has also used his money to buy canned goods to donate to food banks at Thanksgiving. My younger son wasn't quite sure that he liked the idea of parting with $1 per week. Then I explained that he could give the money to any group that he thought was doing a good job to help people, and he decided to donate his money to his preschool (which is a nonprofit organization). He got so much praise from his teachers for donating the money that he really felt good about himself.
My husband and I try not to criticize their choices when they choose to buy something. It's difficult for me to keep my mouth shut when I see them spending so much money on Pokemon cards and electronic games, but anyway it's their money. They might as well make their financial mistakes young, and maybe learn something from that, before they're all grown up and have to make a living for real.
