I understood the value of money only when I was married and had to maintain a household. I guess when you think he will use it wisely like brosen said is a great time but will they ever? At first we just hand it out without any thinking , I think when his demands are a bit over the limit and he comes to ask for more , then ask him if he will be able to maintain an allowance that you will determine for him.
By the way I would say a good age to start would be 12-13 when the become customers.