Although both camps of extremes have great points, based on my experiences growing up, I think they're over-thinking it. It seems no matter how you choose to teach money through allowances, it will be successful for one kid an a failure for another kid.
My parents did a hybrid approach. We got an allowance to teach us money management. We were required to do chores. When we chose to disobey and not do them, allowance was taken away. For me, that worked. I rarely slacked because I wanted my allowance. The money meant nothing to my younger brother and he got away with doing almost nothing. Once a month or so, my mom would prepare a special list of above and beyond chores that we could earn extra money from(and that was $.05-50 per chore). I was pretty much the only kid of the five of us that regularly used that list. My parents' system was successful for me but failed some of my siblings.
My husband never got an allowance, was never required to do chores and was not given an opportunity to earn extra money. He learned little if anything about money management and running a household. He did figure out by 15 that he wanted money to spend and thus got a job and has worked ever since. So my in-laws system was part success and part failure.
Based on my experiences growing up, I decided to allot the kids a pittance very similar to the author of the article. I don't like dealing with $.50 increments so I devised a tiered, full dollar system:age 0-1 $1 a week, 2-3 $2 week, 4-5 $3 week, and so on until they reach 14. At 14 they would start to receive a regular spending and clothing allowance shifting all responsibility for their attire(the laundry too!)from me to them. My parents did this and it was effective for all of us. We learned how to stretch our dollars and to love thrift stores. I will offer a list of extra chores for extra money but probably not more than $2 an hour for whatever extra jobs need doing.
In the article, shoveling snow was an urgent chore that created a bonding experience between father and son. I wouldn't have considered that above and beyond. Kids are usually only too eager to do anything with a parent if it means one on one time. It takes self-disciple and motivation for a kid to look at a chore list, choose to do that over playing and to follow through on their own. I feel that that kind of initiative and independence is worth being paid for. Those are valuable life skills.
One of the biggest factors in any allowance scheme is explaining to your kids why you have it set up the way you do. People, and especially children, thrive on positive reinforcement and praise. If they are aware that you value their independence and initiative when they choose to do paying chores, if you praise them for good money management, if you explain to them that the chores they do without pay are crucial for running the house well(and leaving out the guilt inducing whine that mom and dad do chores too), I think they will feel their importance as a member of the family team and be more motivated. Saying things like "I trust you with this" and "You are so helpful" while they work has a HUGE impact.
