Gone are the days of going down to the local convenience store to buy a piece of hard candy with your well-earned dime. Now, kids could purchase 500 pieces of hard candy, because they are rolling in the dough when it comes to allowance.
A new report found that the number of parents offering more than $10 or $20 a week for allowance is on the rise, Reuters reports.
Meanwhile, the number of parents offering below $10 a week for allowance fell to 68.4% from 77.3% in 2011. On the flip side, 4% of families are giving their children between $41 to $50 per week. For a few lucky kids, there are the more than 1% of families that give between $91 to $100 per week. What, the what?
Stuart Ritter, a senior financial planner with T. Rowe Price — who conducted the Parents, Kids & Money Survey (PDF) — said there are a few reasons higher allowances are cropping up: a better economy and sharing financial decisions with kids, such as paying for their own clothes.
Additionally, older children are also to blame for allowance inflation, Ritter says. The more typical $5 won’t get much for a 14-year-old these days.
Shelling out big bucks for your child’s allowance might not be doing much good when it comes to teaching your kid financial responsibility, Lewis Mandell, the former management dean at SUNY, says.
When reviewing financial literacy tests, Mandell found that kids with unconditional allowances tended to do the worst. He suggests parents tie chores and allowance together to show that money is valued and earned.
Parents should also stick to their guns when little Johnny comes home crying that little Bob gets enough allowance to buy the entire class happy meals.
Remember, you’re not a terrible parent if you only give your kid $10 a week in allowance, Mandell says.
Anyway, I’m going to go see if my 9-year-old cousin wants to buy me lunch.
$50 a week? Allowances keep climbing [Chicago Tribune]