The reason I'm being a nit-picky is because of these comments...
While I like the idea behind teaching kids how to save etc,- really the most effective way to teach kids the value of money is to have them earn it themselves.
Not one of the most successful people I know (multimillionaires) received an allowance. They all learned from an early age, if they wanted something, they were going to have to figure out how to earn the money on their own to do it. They believe this one skill has helped them succeed in life more than anything else
At some point, a child has to use capital that they did not earn (either in the form of allowance, a monetary gift, or materials purchased by a parent) in order to earn more money. At some point, something has to be given to them (when they are too young to go out and mow lawns, etc).
Maybe the term 'allowance' should be replaced with something more PC like 'Children's Financial Learning Plan'. In my mind, the initial 'allowance', or CFLP (started at a young age) would be used to teach my children the basics about money -- spending, saving, giving. As they got older, the base 'salary' or 'allowance' would become a smaller percentage of the overall CFLP, and more emphasis would be placed on them actually earning the money themselves, either through extra credit chores (like pulling weeds), or though things like selling lemonade on the street. Eventually, I would hope that they could earn money on their own doing things like mowing lawns for neighbors, washing cars, etc.
I also think that there is some value in teaching things like 'you can have a soda pop or a you can have a dollar', as it teaches kids the correlation between wants and needs, and gives them a real world example of what unnecessary spending can do to your cash supply. I had thought of possibly making them use money from their CFLP to purchase unnecessary items (like a soda pop at a restaurant). Of course, since my kids won't touch soda pop anyways, this example is all hypothetical.
Thanks for your input, BTW; you've got me thinking here.