Our son has 3 jars -- one for saving, one for giving, one for spending. He has to put a portion of money into each jar each week (he gets $1 - so 50c for savings, 25c for giving, 25c for spending). If he gets money for Christmas or birthdays, the same proportions will hold. He's 5, and we'll raise his allowance by $1 a year (his idea!).
"Savings" means that it's something larger or long term that he wants (right now he's coveting a $30 garbage truck, which I refuse to buy because he already owns 3 toy garbage trucks!), or put it in the bank. "Spending" means he has complete control over when it's spent (candy, balloons, etc.) He's only ever bought 1 candy bar. Mostly, he just looks at it. He's finally got enough in his "Giving" jar (about $3) to do something with it, so we're going to talk this week about what to do -- does he want to buy school supplies for kids who don't have any? Does he want to give it to the class at school that's collecting to send money to the WWF to save the Black Rhino? Is there another idea he has?