We have a weekly allowance of $15 USD per person. This is our no-questions-asked fun money. My SO buys comics, I buy yarn. Any special personal spending comes out of this account, such as Ancestry.com fees, music or books. We also save up for larger purchases; you definitely know you really want that $900 spinning wheel when you've been saving $15 per week for it for 15 months!
Everything else comes out of the household account, and must meet the spending criteria (do we really need it, can we put off buying it, can we get it cheaper used or elsewhere?)