We went through the 'should we get an agent' question recently. We live a 4 hour train journey from London (where realistically the good agents are - although there are a few in other major cities). Last June I sent ds2's details off to a well regarded London agent. We were contacted about 10 minutes later and asked to arrange a meeting & for ds2 to prepare a monologue.
It was a total waste of time. I had made clear when contacting them where we lived but they seemed completely surprised when we turned up and mentioned it again. On meeting I asked what would be expected of us and was told we would be expected to go to London at short notice up to four times a WEEK to audition for commercials. I said we couldn't do that because of where we lived, and we were more interested in going for film/TV (they didn't really do theatre) than commercials because commercial casting is such a lottery we couldn't justify time off school for it. Anyway that went down badly 
but I didn't see any point in lying. TBH I just came away feeling we weren't on the same wavelength at all and I really didn't like them. DS2 didn't like them either; found them a bit severe.
I don't regret meeting them because it really helped me work out what we wanted. Agents are great if you a) live in London or near the agents base and b) want to make money. A LOT of the serious child agencies place children for commercials - because those pay extremely well (and agencies are first and foremost a business). We weren't really interested in commercials (although if a local well paid one came up we wouldn't say no!). And we're definitely not up for schlepping to London all the time.
A local friend has managed to find a London agent for her child who agreed to not submitting for commercials at all and often suggesting to CD's to use video for first rounds - so they are out there. And if we found an agent like that we would be definitely interested, but I think those are rarer than hen's teeth!! So we haven't bothered applying for any more.
In ds2's case he currently wants to go into acting/musicals/singing. So for him things like NYMT/NYT or joining local high quality theatre groups when older are more useful than an agent. The other advantage of not having an agent is you can apply for what you want to. There's no pressure to apply for roles you're not keen on (advertising a product you don't agree with for example), but nothing stopping you applying for things your agent might want to submit a better match. So in ds2's case because he plays down a lot we can submit him for roles that an agent might want to submit someone younger that they had on their books. We can also apply for things that don't pay very much or at all without worrying about pissing an agent off by making him unavailable for paid work.
Having said that if you want to audition for most TV work or big budget film you will probably need an agent.
What I have done is got ds2 a kids casting call pro page. www.kidsccp.com/uk/ I think it helped him get the film (I submitted it to the director & producers). A lot of NAPM-ers have Starnow pages as well, but we haven't done that yet.
In terms of earnings I think it's fine to do whatever you want with it! DS2's has gone into a savings account and I suggested he might want to keep it to potentially pay for further education in the future - especially if he wants to go to drama school as it's so expensive. He is going to to take some out to pay towards a laptop this xmas (we will pay the rest - but usually a laptop would be too £££'s for a xmas present).