As a parent I quickly realized that allowance does not teach my kids the true value of money. Kids should associate money with compensation not donation which allowance really is. Teaching your kids to have realistic appreciation for money from a young age is incredibly important, so your children don’t grow up thinking money just shoots out of the ATM whenever you need it. Make sure they know that money is earned by services rendered, the sooner they realize they have to work to earn cash, the better off they’ll be. They’ll also enjoy their games and toys much more when they’ve earned them. They will treat their possessions with respect, remembering how hard they had to work to be able to afford them. I figured the best way to teach them that is to introduce the financial model into their daily lives, and since I find circulating cash among my kids inappropriate as it creates a fixation with the actual object not the value of it, I developed 'Bits'.