Disagree. The point is to get the child to internalize the value of savings and investing. Silent accumulation of wealth (the point of investing as a adult) is useless from an educational point of view (the point the parent is making for their child). It also teaches the value of speaking up for what is due. Hats-off to matb for it, IMO.

We give our kids an allowance of sorts for chores above the basics. We also allow them to blow this money on "stupid crap". We once let them split a pack of candy at an ice rink, but they didn't have the money yet (we were traveling). Once everyone agreed that they'd buy it with their allowance, I bought it with them understanding that they needed to pay me back.

Later that weekend, it came time to pay their allowance. We could have easily paid them $2 each (the net), but it was far more effective to pay them $3 each and then make them physically pay us back the $1 each, even though it resulted in significant frustration and a more than a few tears now that the candy was gone.

That's education, not a mind game.