E got her first allowance. I gave her $3 and I took her to the dollar store to buy whatever she wanted. I explained to her that she had $3 so she could get 3 things. She picked out 4, so I expained it again. We went through this a few times-at one point she wanted every color of all the chip bag clips they had! She started to get upset, but the she was ok with it when I explained. At the end she had a cup, a basket, some chip-bag clips, and stickers. So, right before we paid, she put back the cup.
She's been quite happy with her purchases! The stickers are on the car window, and she used to basket to carry books in and out of the library yesterday. The chip-bag clips haven't gotten much use yet, but I'm sure they will.
I forget where I read it now, but recently someone wrote that an allowance can't be called an allowance if it's worked for. That makes it wages or pay. That's how I feel about allowance too. E contributes to the household work as much as a 3 year old can and is willing to. However, that has nothing to do with allowance. She is part of the family, and is entitled to part of the money.