When my kids want something, unless it is a reasonable basic (lunch / water / medicine), I make them buy it. Where I am soft is when I see an intellectual value (non fiction book, raspberry PI). Sometimes I will split the cost. Games and candy are fully their expense.
Logic - if I can teach them to handle their money now it will save me the midnight call in the future "Dad ... /cry I am 3 months behind on rent and they want to throw me out of the apartment....". WTF I am not paying your 3 months rent! The allowance, added over the years, is significantly less than 3 months rent, I think.
Reward - My young son and I were at festival, it was hot. He complained he was 'parched'. I was impressed he knew the word, so I expressed my concern and queried as to the best remedy. My son informed me that Lemon aid would work the best. I agreed, it would, and he marched over to the Frozen Lemon Aide stand. When he heard me mention that it was with 'His Money'. He stopped dead in his tracks, turned around, and asked if he could get a drink of water from my water bottle. At that point I knew it had been working. Dads money is FREE money, his money is a completely different thing.