Toddzilla pointed out that when he learns his multiplication facts he'll need a different prize. Good point. Fortunately, I don't have to worry about that for quite some time.
Just a note on prizes and academic work. Our hope and prayer is that our children love to learn for learning's sake. We don't motivate with incentives in terms of the daily grind. But we have made big deals out of two (so far) milestones that we feel are particularly important: finishing phonics and learning your times tables.