The most common reason I have heard is that there are psychological benefits from a child having a sense of responsibility and ownership of the money, as well a

The most common reason I have heard is that there are psychological benefits from a child having a sense of responsibility and ownership of the money, as well as learning the value of the money. There is also the fact that, in some cases, a child better knows how to spend money to make himself happy then his/her parent. Obviously this is not true for every type of expenditure, but if you are going to spend $X to buy your child luxieries like new toys, it seems reasonable that your child would be better informed in how to spend part that money. Or, you can decide what you think (s)he wants, and buy it for him/her on arbitrary dates such as Christmas or birthdays.