Dittany, when I said mentally wrong, I meant feelings & thinkings not chemicals & structure, sorry, I'm probably not making much sense!
and as for rules, over punishing - I think you've got a point. I do think that taking her presents off her seems very harsh. Christmas is stiff a month away, so it's a long time to be punishing her for.
The plan was she earnt money by doing jobs and that she could save it for what she wanted. No jobs were compulsory, always sugested rather than enforced. If she said no, that was that. The only rule was the dishwasher emptying was offered to her and dd2 in turn, cos dd2 got cross that dd1 did it all the time and had more money!
She's managed to earn approx £15 since September (at a rate of 4p per minute ish). Some weeks she's done nothing, other weeks she's been super keen!
It was her choice to save for a DS. As we realised it was going to take a very long time, we said we'd get it for Christmas (on condition of good behaviour) she then chose to save for DS games instead.
I don't think that's overly harsh set of rules. She ultimately has the choice of what she saving for (she's spent a few bits of money on other things meanwhile) and how many jobs she does.
Today we've found out she has..
stolen at school count 1 - someone else's toy (actually a classmates's sister's irreplaceable toy) that she pinched, broke, lied about pinching
stolen at school count 2 - her class teacher's notepad,
stolen from me - at least £3 based on receipts in her bag
been going to shops before and after school (despite knowing this was out of bounds) to buy sweets
and also there's the mysterious appearance of some pens, batteries, rubbers, wristbands and chocolate in her bag
so far she's been told no TV or PC this weekend and no DS for Christmas (this was offered about a month ago on condition of good behaviour).
I think maybe she needs an option to earn the DS back for Christmas. If she gets nothing / very little we;re all going to feel awful