A few weeks ago I wrote about how my parents and one other family handled allowance.
Since then I’ve come across two allowance articles worth sharing.
New York Times Article
Alina Tugend has an interesting 2006 article in the New York Times about the “slave wage” allowance she paid her kids. It’s worth a read. She mentions two studies that I found interesting. The studies are a few years old, but I doubt much has changed in the world of allowance over the last few years.
The first study:
“A 2005 survey of almost 1,500 children by Yankelovich, a research firm, found that the most common weekly allowance for 6- to 11-year-olds was $5 to $9, and $10 to $19 for 12- to 17-year-olds. Around 15 percent of 12- to 17-year-olds received $20 to $49.
“Forty-one percent of those surveyed said they bolstered their allowance by doing extra chores around the house or jobs like baby-sitting; interestingly, more than 40 percent of children in all age categories said they received no allowance.”
It says the most common allowance was $5 to $9 per week. But 40% received no allowance, so actually it seems the most common allowance was zero!
The second study also concluded that most kids did not receive an allowance. In a 2004 survey of 6,000 teenagers, the researchers found:
“59 percent said they did not receive a regular allowance; 30.4 percent said they received an allowance that depended on the completion of some chores; and 10.6 percent said they were given a regular allowance that was not based on chores.”
Based on this study it seems that most kids do not receive an allowance. Of those kids that receive an allowance, three-quarters were required to complete chores. It seems that my parents were in the mainstream after all!
The second study concluded:
“In general, teenagers do not have strong financial knowledge, and that whether or not they received an allowance did not seem to make much difference in their financial literacy.”
According to the study, allowance didn’t seem to help kids understand money or finance. I believe it largely depends on the parents’ approach. If parents give their kids allowance but don’t teach their kids anything else about money, of course the kids aren’t going to understand personal finance.
But if parents take time to teach their kids about money and credit cards and banks and stocks and mutual funds and mortgages and health insurance and so on and so forth, then the kids are going to have a strong personal finance background. Allowance is only one piece of the puzzle.
Palo Alto Medical Foundation Article
The Palo Alto Medical Foundation recognizes that there is no one right answer since all families are different. They broadly mention that some experts believe you shouldn’t tie allowance to regular chores nor use allowance as a tool to punish bad behavior or reward good behavior.
My parents broke that rule. Regardless, until someone convinces me otherwise I’ll continue to believe I turned out largely normal.
[…] Allowance For Kids - a Reprise […]
Despite what the “experts” think, I’ve always tied allowance to work. In the real world, you get paid when you work, so I like to model that in my “world”. I want my kids to know that hard workers get paid well and lazy workers get paid poorly. If my kids get paid poorly, I’d like it to be now so they have a chance to learn better before it matters.