The basic thesis of the idea is that if kids are given a legitimate and fair way to earn money, they will develop initiative and motivation because they perceive ownership. If they have a chance to budget and buy more of their own things they will learn discernment and discipline. If they save and invest their money they will understand delayed gratification. And in the process, both their gratitude and generosity will have a climate in which to grow.
The basic process of the idea is to take the money you are already spending on your kids and re-route it through their ownership and choices, and to make the whole thing part of a natural economy where parts of the money that comes into a household goes out to those who do parts of the common work around the home.
The basic premise of the idea is that it is better to have children learning the lessons of earning and spending and saving (and making mistakes in all three) while they are young and the stakes are small than when they are older and the stakes are large (and when banks start sending them pre approved credit cards.)
The basic props of the idea are a family bank (a big wooden box, maybe painted silver or gold, with a big padlock on it and a slot in the top), a checkbook for each participating child (a real checkbook with the child’s name imprinted and with a check register—get them from a bank or a check printing company, or use some old checks of your own), and a basic peg board with four pegs for each child (the bigger the better, and the pegs had better be tied or chained to the board, or they are sure to be lost.)
Keep in mind now, as we discuss the details of implementation, that this system is not just about money; it is about responsibility and initiative and self-motivation—and money is just the vehicle or the raw material that is used in the process.