I saw a few parenting blogs sharing this concept and decided to make my own.
There were a few versions but I decided 5 compartments should be sufficient for us.
Most blogs cited that this helped the parents as we only needed to pack the money once a week.
It also promoted transparency of usage. I told Z that he should take the money on a daily basis and returned the balance to the corresponding compartment. At the end of the week, we would tabulate to see the total savings. He could use the savings to buy anything that he wanted*.
I would probably get a notebook for him to record the expenditure and sign off the weekly savings.
Z was quite excited with the system. We shall see how that worked out for us.
* denoted that he required approval from us.