Well, you've already figured out that giving treats buys their cooperation in the short run, but it kind of creates a huge problem in the long run. The treats will get more and more expensive, and the demands will only increase. Just for fun, calculate what you spend on stuff that isn't necessary over the course of a month, and you'll be shocked at how much gets frittered away at the dollar store. Moreover, your kids don't really have to decide what's really important to them, because they get something every time. You'll probably also find that rewarding kids with candy or dessert turns into a possible diet/obesity problem later on in life. I used to let my son ride on those little rides (mini carousels, etc.) at the mall - then it turned into a nightmare.
Families do chores because it's part of living in a family, not because they get paid. Getting dressed, brushing teeth, picking up the basic toys, taking a bath, putting on a seatbelt, and coming to the table are not rewardable tasks. They are expectations. Dishes, laundry, dusting may be rewardable extras. Seasonal and occasional chores may be rewardable - raking leaves, sweeping the garage, etc. -- but again, you have to have a fallback position if a kid says "no".
Paying them for daily chores actually devalues the work. Families cooperate so that there's more money at the end of the week or the month or the summer. If they enjoy helping, great. If they don't, too bad - they still have to help. The longer it takes to get stuff done, the less time YOU have to play a board game with them or get out the arts & crafts supplies or put on their favorite video.
The kids need age-appropriate chores. I'm a big believer in turning things into a game or a cooperative venture. Even a 2 year old can match clean socks. Kids can learn colors by sorting dirty laundry into darks and lights. They can put out napkins and silverware. The 6 year old can certainly carry dishes to the sink; maybe the younger ones can if they are plastic and don't have a lot of leftover food on them that will wind up on the floor. Everyone can carry in a grocery bag if things are packed by weight. The little one brings in the toilet paper, the middle one brings in the boxed goods, the oldest handles canned goods and meat, you handle glass and fruit.
Kids can put toys away especially if they have storage bins with a photo of the item on the outside - cars in this bin, blocks in that bin. Kids who can't read can identify the pictures. It's a lot easier than "clean up your room" if you can say "pick up blocks and stuffed animals" or "put shoes in the closet."
Money doesn't mean anything at all to a 2 year old, and it means very little to a 4 year old. Instead, have them work together to earn a family activity, which can be a board game or a pool/beach afternoon, or a nature hunt. Not everything has to cost money.
Having assigned chores can be required, and extra chores available for a small amount of cash - but it's hard to equalize it among kids of different ages unless you divvy up the chores by each child. Having them work cooperatively is great too, if you can keep the emotion out of it and not get sucked in the job of referee when the older one yells, "No fair! I'm doing everything!"
Makes some of the rewards non-monetary - trips to the library to borrow a book, trips to the children's museum once a month, going to the park, a trip to the fire department to climb on the engines (in our town, the firefighters love this), making a picture book to send to Grandma, etc. And having them give some money away to the needy is great, but it can also be accomplished by having them choose a toy per month to give to a shelter, or helping to choose HEALTHY food choices for the food pantry.
You want to break them (and you) of the bad system, so that means you need to explain that you've thought it over carefully and you think it's not a good idea. You figured out what it adds up to over the course of a month - if you can, put a pile of money in the center of the floor, and tell them that's what you spent just in July! Tell them it's easy to lose track of money - you did, and you don't want to teach them to do that. You want them to learn to save money for something special, not just buy junk at the dollar store at every whim. Let them know that from now on, things are going to be different and actually much much better. Tell them what you have planned at the end of the month - an amusement park, a beach, whatever. When you go to the store, tell them the treat money is going into the beach fund. Work with the kids to make a special bank - use an oatmeal box or one of those big canisters of pretzels - cut a hole in the lid. Put stickers on it that indicate the fun thing you are saving for. Money you saved by using coupons or not buying candy at the store goes into that jar. Let them see it build up and let them help you by putting the money through the slot. Put it up high (e.g. on top of the mantel or the fridge) where they can see it but not get to it. Then give them each their own piggy banks (again, you can make them -- a good exercise in economy as well as fun) for a small amount of money. Quarters are good, but get them used to different amounts (assuming the 2 year old doesn't put stuff in his mouth). They can also learn to count money, roll coins, take them to the bank, etc. Get those coin sorters at any office supply store and free paper rolls at the bank.
Banks also let kids open no-fee accounts - maybe that's something that happens when they turn 5? Something to give the oldest a special privilege and let the 4 year old look forward to?
Just some ideas - you don't have to do all of them. Good luck!!
