You'll see a lot of advice, and my suggestion is to try a bit of everything until you start to see the right framework for your family. Whether this is allowance, family contribution, piece-work, incentives, etc really depends on how your family operates.

One thing that I believe my kids has responded well to is the re-assurnace that when they have earned money it is theirs to do with as they wish. It won't be confiscated for punishment, and we don't force our children to make specific purchases. Further while both parents will often advise on purchases, we don't stand in the way of kids making bad decisions (quality, quantity, utility, etc).