I need your advice...

I'm having a parenting dilemma. Since I had Jacob 3 years ago I had in my mind a whole list of things that I would never do, or make sure to do. That list has been edited so much I just threw it away...I didn't know anything then and I still don't!! I have been wanting some suggestions on what to do when your kids wants something, like a toy. I don't just want to give him everything he wants, just because. I'm not quite sure how to go about letting him earn it.

Last week Jacob spent his own money on a little toy fire-engine. He was so excited to have enough money, but it took almost all of his money. Now he thinks he wants to buy another toy, but he doesn't' have enough money. What do I do? I don't want him to think he can't ever have it...it's only like $6. Do I pay him for jobs? I don't want him to always expect pay when he does something around the house. Do I make him earn it some other way? When do you start teaching about money managing? We have already had the tithing talk and he is okay with that concept.

I'm not quite sure which path to take. Do I make him save the money, or just earn it through good behavior? I'm not quite sure how to do this.

Any advice you have will be greatly appreciated !! Thanks.