Allowance

Well this week we decided to start giving allowance to Skye. He starts second grade tomorrow, and since we have no clue on this whole thing, just decided that this seemed like a good age to start the whole process. Neither David or I like the idea of it being directly tied to chores around the house, etc. , but talked about it with Skye as it being a part of being a member of the family, and being old enough to handle it responsibly. We actually have been talking about it with him for the past several weeks. Discussing that all we have comes from God, giving back a portion of what we receive to God, etc. I hope that we are handling this right.
Looking around at friends and acquaintances I really feel that a good perspective, attitude towards money, budgeting, debt, etc. is one of the important tools we need to give our kids that will last into their future. I've seen how a parent's attitude towards budgets, personal spending, etc. seem to pass almost directly onto their children with horrible consequences at times. So the question is, what can we be doing to impart a good relationship with finances to our children?
I try to make every effort to introduce the kids to money issues. When they ask to stop at McDonalds for a treat and we don't have the money, I try to explain to them that we don't just go because we want to, saving up money for what we really want, and limited resources (at their level of course). But do these thing sink into little brains?
Yesterday Skye was asking why his cousins and grandparents get to go to Egypt for Christmas and he can't go. I felt I had to swallow my pride a bit in explaining to him that we didn't have the money for a trip like that, and that people can't always afford what others can. We discussed it for awhile as he had a lot of questions. It's hard as a parent to admit that you can't give them everything everyone else has. But then I felt better after it, hoping that by discussing it with him he gleans that there are special things that he gets to do that we save up for, but we can't afford everything. So we have to pick and choose and save wisely for what we really do want. We don't have to keep up with the "Joneses" and some things are better if you have to wait for them. Skye really is becoming such a mature young man, he can have really deep conversations without even realizing it.
So to close, as I'm rambling a bit here. . . I'd welcome any suggestions anyone has on giving our children a healthy outlook on finances.