Does this work? (Fake allowance for kids)

Rob and I were talking about whether we want to give our kid an allowance and I came up with an idea that sounds really good in theory but I wonder if it would actually work?

Out: Paying your child real money for doing chores, getting good grades, etc.
In?: "Banking" theoretical money when your child does the above.

Explanation:
Chores are worth $.50 and good grades are worth $1.00 each. As your child does his/her chores, you "bank" the money into an account (which would be written in some sort of ledger) and as the tally increases your child can then use the money to buy something they want. Instead of actually giving your child money (which they can easily waste at a candy shop), they have to save money until they really really want to use it. Here is a scenario, let's say your child really wants a new iPod case and they see that they almost have the money saved in their "bank," but it is close to the holiday season. You can say to them, "what if you wait and see if you get it as a gift and save the money for something else you want." or "are you sure you want to buy it or do you want to wait and save more money to see if something better comes along?"

This gives your child the lesson of personal choice and saving money and buying quality versus quantity. Then, hopefully by the time your child is actually making his/her own money they have the concept of saving and waiting and won't spend frivolously (fingers crossed!)

I'd like to know your thoughts. Obviously, Rob and I are far from employing this practice, but it's always good to be on the same page when the time comes.