Allowance Inflation? Yeah, It’s A Real Thing And Now Kids Are Rolling In The Dough

pigreplaceplsGone 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]

Read Comments7

Edit Your Comment

  1. MathManv2point0 says:

    $10 a week?!?!? Damn, by the time I was old enough to be spending more than $10 a week (on non-essentials) I got this thing called a job.

  2. SuperSpeedBump says:

    Heh, I just told my Father about this and he said “What’s an Allowance?”, to which I said “Exactly!”

  3. SingleMaltGeek says:

    “How Much Should Kids Get In Allowance?”

    What, a 5-year old or a 15-year old? How is this even answerable?

  4. Xenotaku says:

    I had to put the “$0” answer to the poll, because this seems to be for weekly allowances, which I don’t really agree with (also, as someone else said, for what age?). I got $5/month once I was in high school. I can see $10 a month for a high schooler now, but not per week. I collected comics, and, at the time, $5/month was enough for me to get 1-2 books a month, plus a little extra if I wanted any treats. $10/month’ll get you the same, plus a bit more, now.

  5. SingleMaltGeek says:

    Well, to offer a useful data point, our 11-year old daughter gets $5 a week. She saves well, and has paid for her African pygmy hedgehog and all supplies, her copy of Minecraft, and any apps she wants to play on my iPad (when I let her). She also puts money in her college fund. She’s so responsible that the only reason we don’t give her more is because she takes horseback riding lessons, which aren’t cheap, and we’ve told her that while we pay for those we will keep her allowance lower.

  6. skpurdy says:

    Our kids get $1 per year of age (tied to the older kid’s age so the younger one gets a break) but they must put half in savings each week. We think teaching kids to save is a very important part of teaching money management. They hate it!!

  7. Alecto67 says:

    Our kids started off at a dollar when they turned 5, and it increases by a dollar every year. However, their chores have also increased accordingly. Their first chore is that their room has to be cleaned by noon each Sunday and then we added to that each year. So our 6-year old is getting $2 (unloading the dishwasher, taking out the kitchen trash), and our 11-year old is up to $7 (emptying all the trash and taking it to the curb on trash day, wiping down the kitchen table, mowing the lawn, cleaning the bathroom counters, etc).