In addition to the infographic below, you may be interested in my article about kids and allowance that I published a while back. You can check that out here:
I contend that it is possible to use an allowance to teach a child to invest. Teaching investment philosophies can pay off in a big way. The power of compound interest is most pronounce if a young adult starts investing early in life. Therefore, if you can teach a child about investing, hopefully that child will invest more regularly as a young adult. We all want our children to do better than we are doing in life, so if we can teach them while they are young to be wealthy when they are old and gray, we have succeeded, to some degree, as parents.
One of the most important lessons of investing is to pay yourself first. Quite literally, one must take a portion of every paycheck and immediately set it aside as an investment before paying any other bills. This can seem to be tough to do but it really is more of a mind set and a practice than anything else. If you are setting this money aside from an early age, you will likely set it aside as you grow older. By starting your children off with this practice on their allowance, you will teach them the habits of a lifetime.
My oldest son has graduated from college is now launching his career. When he started his first "adult" job, he immediately understood the benefit signing up for the stock purchase plan and the 401K investment plan offered by his employer. Putting that money aside before he paid his bills made perfect sense to him.
I may not have been a perfect father over the years, but it does appear that I taught him how to start investing when he was only 6 years old and it stuck.
In the meantime, the below infographic from Mint is an excellent overview for you to consider.