As one of the younger ones in this discussion, I can say that an allowance for nothing is not the answer. There are chores to be expected of you, and then there are opportunities to make money elsewhere. Its tough being a kid (under 16, even 18 in some fields) and trying to get a job. A lot of places don't want to risk it on a kid that young.
My parents didn't really pay me as a kid for doing things like household laundry, cleaning, even maintenance on the cars. However when I first got my license they did help me pay for my insurance. Mind you I had been working for years by age 16, had bought my own car (my cutlass) at 13 with cash I earned. Getting a kid into making money young allows them to learn the value of a dollar, and it is a worthwhile lesson, whether they are doing extra work around the house to earn a few bucks, or they decide to cut lawns, open a bike shop in the house, be a handy man (all things I did for cash), or whatever they choose.
Another perspective - charging your kids rent: I don't feel that it's right. If they are under 18 or in high school, no way. Once they are out of school, if they are still doing things around the house, it isn't right in my eyes to charge them rent. This is obviously different if they freeload, but if they are picking up their slack and doing something like going to college or working full time and being SOMEWHAT responsible with their money, give them the minimum of a roof over their heads. I say this as a 26 year old who at 25 finally moved out of my parents by purchasing a house in NJ, not a cheap area to buy in. Living at home allowed me to afford college, it allowed me to afford to save once I started working full time, and I was able to get out after a few years of saving.
If you feel your kid is being immature with their money, I would suggest charging them rent and saving it for them for when they finally realize they need to straighten out. You are the parent, you need to have those discussions with your kids, and you should want to help your child succeed. What better way then when your kid gets their act together you can help them with their own money?
Now, if your kid is just a freeloader: does nothing around the house, doesn't help, makes a mess with no regard for others, doesn't go to school OR work, yeah they may need a reality check. If you use that money to help offset the cost of them living there and doing nothing, it makes some sense and could be justified. It may also act as a motivator to get them working or doing something. Remember, rent should be proportionate, and not excessive. This is kinda their only option at the moment, don't make it unobtainable so they cannot do it. (Not saying anyone here has done that, but I have seen some horrible instances of parents charging a kid $500 a month while in college and working full time, as if college wasn't enough of a financial burden)
You are the parent, your kid is your product, do what you need to do to make your product viable. Obviously young adults can make decisions on their own, but the hope would be that you assisted them with learning the right choices to make from a young age.
/rant
I'll step off my soap box.