About a year ago, we got our kids, then ages 11 and 13, their own ATM cards that linked to a checking account, but we didn't order checks for them. We have $15 deposited into their accounts automatically each week, and it has been (I think) the smartest thing we've done yet in teaching them about personal financial management.
Before, they had an allowance, but we often forgot to pay it, and not both of us were consistent with making them use their own money vs. us buying something. But the deal with this new system was, and is, that they pay for EVERYTHING -- clothes, shoes, movies, outings with friends. Everything -- except a few things outlined below:
-- We do a back-to-school shopping trip;
-- We buy sports-related necessities;
-- We buy if we do something together like a movie or meal out, but they buy if they do it without us. (double benefit = they're still seeing a benefit of having us around!)
-- I often pick up things like underwear and socks.
They have both turned into big savers, AND literally all the nagging has stopped, for going on a year now. They buy what they want (if it fits with our other rules) if they have the money for it.
One very cool result - I used to pay for their twice-a-week school lunches, which were maybe $3 each. After we changed to this, they were free to buy it themselves if they wanted, but both chose to bring food from home instead. They make their decisions carefully, and both have accumulated quite a bit of savings. My daughter mostly spends on itunes and going to movies, while my son likes to go to the bagel shop with his friends. For him in particular (the younger one), it has given him a sense of pride at carrying a wallet and using his own money. For my daughter, it's allowed her to save for weeks and weeks and then take a larger amount out and buy clothes or whatever.
One surprising thing was I intended it to be a subsistence allowance and for them both to want to earn more. However, they were very happy with the amount (it was a raise from the $20/month they'd been getting) - to the extent that my daughter didn't seek out babysitting jobs. That disappointed me, but as a friend said, she was valuing her time over money.
BTW, the amount will NEVER go up, no matter if they're 12 or 18. It'll always be $15/week. They don't have phones yet, and when they want to get them, they'll be paying for them. I might help them buy a shared family car in a couple years (because it will make my life much easier!), but they will pay for some of it as well as some of the insurance, gas, etc.
Anyway -- from my experience, I say go for it! My intention was to help them learn to live within their means and make good choices with their money. So far = achieved.