We don't give money for chores. Chores are part of keeping a family running, and without them, the house falls apart. Chores are not equivalent to a 'job' for a child, IMO, they're part of daily life. I don't get paid for household chores and neither should they.
We do, however, give an allowance (when we remember -- right now we're down to about every 3 months because I keep forgetting and my kids don't remind me). We started with $1 or $2 (can't remember) a week at age 5. We then asked the kids to place 1/2 of the money in 'spending', 1/4 in savings and 1/4 in giving. We had separate jars for each.
Here's what I discovered: My kids don't spend ANY of the money. Ds will, if prodded, spend some of the giving money. Dd has hopelessly mixed hers (she likes to take out her money and count it), and now she won't spend any of it for charity. (She is, however, willing to do extra chores to earn money for charity -- we have a charity project at church that she's doing extra things for right now.) I'm not very comfortable with the extra chores = money, and probably won't continue it. Dd regularly helps weed the garden, set the table, etc. and I'm afraid this is going to kill her natural desire to help. (Ds, on the other hand, likes to be served and never does extra unless directly asked. however, he doesn't mind parting with his money.)
Dd claims she's going to save all her money for college. However, she's really coveting an American Girl doll, and might be willing to part with her stash for that. (She's trying to talk me into paying for 1/2, as she's 'only' got $50. We're looking on Ebay, and her latest was that she'd pay for the doll and I'd pay for shipping!)
1. Five is too young to start an allowance. They don't really have 'wants' for spending money until they're older. Maybe my kids are less acquisitive than some, but they get money (from relatives) and gifts at Christmas and Birthdays, and we provide basic clothing. We get our books at the library 99% of the time. 10-11 is a better age to start, for my kids at least.
2. Chores should be part of the family routine. It makes the child feel like a contributing member of the family. Money for chores diminishes that.