I was watching Suzie Orman one night (randomly) and LOVED her suggestions for kids. She says no "ALLOWANCE"; why are you giving money for either doing nothing or for the simple tasks to contribute to the home maintenance (making your bed, etc)? Also, why would your DC's allowance increase just because you he/she gets older?
She says - cash for work. Period. 3 dollar tasks, 5, 10, up to $20. The child must complete many 3 dollar tasks at the highest standard before even being allowed to undertake a job that pays $5.
I'll respond to "why are you giving money for either doing nothing or for the simple tasts to contribute to the home maintenance?" question. We have allowances in our family because we feel our job, as parents, is to raise children to eventually become responsible adults. One thing responsible adults do is handle money. From the experts I have based my decision on, the concept of giving an allowance untied to work/chores is two fold:
1) Independent of how much work the child is doing, they need to handle money in a responsible way. I would MUCH rather my child make their horrid money decisions when it means they can't get the new toy they wanted for a couple extra months than it means they've spent their rent money on something they didn't need, swim.
2) Independent of how much money the child has they still need to do chores. The problem with tying chores to allowance is that you are *paying* them for performance. If they no longer need that money, does that mean they no longer need to do the chores? To have a functioning household, you need to have all members working together---- paying for chores is making it appear that you get paid for everything and, if you don't need the money, no longer need to do the work. It can become a serious issue as the kid becomes teen aged. My DD gets a $25/month allowance. If she had the option of not doing chores and forgoing that allowance I think there is a pretty good chance she would never help around the house again. Logically, why would she? She gets paid $7-10/hour to babysit and makes twice her monthy allowance on a good night of babysitting. When you're talking about a 15-16 year old the situation can be even more extreme.
Lastly, IMO, why should "allowance" be different than other expenses attached with children? They are not forced to "earn" their food, rent, clothing, lesson money, etc... I don't see that much difference. Do you feel your children are learning that they will have a food and clothing if they don't work by housing and clothing them?
Anyway, it is truly a personal preference, but I thought you might be interested in "the other side" so to speak.