We do not have money to burn. And it does not grow on trees planted in our yard. My children, however, act like it is plentiful and renewable. One reason that I pushed for Family Bank (iPhone app) is to track each child's deposits (earnings from chores or gifts from family) and expenses (toys, candy, iTunes).
In the past, we had lots of money mishaps. Sometimes, they handed the money to a "responsible" parent. I usually placed the money in an envelope, which we never had handy when the child found the perfect toy at the store. Since Ben and I never remembered the amounts in the envelope, we relied on the child's memory. They always swore that they had enough money, but that often was not the case (funny, how they forget money spent but not money owed).
Many times, money was lost. Not huge amounts, but a dollar or two left at school, lost in their room, or allegedly stolen by a sibling. When money went missing, if realized, the affected child would share his/her loss with the entire family. Listening to crying and blaming of thieves made me want to take all their money and burn it.
With Family Bank, I deposit their earnings and gifts into their virtual accounts (I just add the money to my wallet). I act as the bank. When we are at the store, I look on my phone and check their account. I know if they have enough money for that "must have" toy or candy bar. If they do, I just deduct the amount from their account (I pay for the items and then deduct from the appropriate account).
Since my children rarely want to share money with each other, each child has his/her own account. Attached is a screen shot.
Yes, one of my children received $70 as a gift. I wanted to charge a handling fee. How much money does an elementary school kid need? I think he realized that I was eyeing his money because he immediately spent $70 at the on-line Lego store.
Disclaimer: There were a few times that I "borrowed" money from the envelopes to feed my Starbucks habit. It is not shown on the screen shot, but each transaction has an explanation i.e. -$70.00 at Lego Store. This feature has kept me honest.