Even Kids Benefit From Better Economy: Allowances Are Rising
That averages out to $65 per month and $780 per year -- enough, as the AICPA points out, to buy an Apple iPad and three Kindles.
That study says parents begin cracking open their wallets and pocketbooks when their kids turn 8, with about 61% of parents giving allowances to their children.
The Reuters/T. Rowe Price data shed more light, saying the average weekly allowance is rising: More parents are edging above $20 for a weekly allowance; 68% of American parents give $10 or below for allowance each week, but that's down from 77.3% in 2011.
The data indicate parents are feeling slightly better about the economy. The number of parents who give their kids between $40 and $50 per week doubled last year, and 1% of U.S. mothers and fathers are handing out a cool C-note ($100) on a weekly basis.
Experts advise using allowances to teach kids about money and debt, training your children to pay for goods and services, especially at the counter in retail stores. It should also teach them math skills such as how to budget for a new toy or game.
One approach is to give a child $1 for every year of age -- so a 9-year-old would get $9 per week, then $10 per week after the next birthday. Tie that allowance to work, giving it only if the child has completed chores for the week.
It's OK for kids to "negotiate" raises if they do more work around the house or save more than half of their allowance. Set goals, follow through and be consistent on the rules and allowances can be a great tool to teach kids the value of money; to prioritize savings and engage in some old-fashioned bargain hunting; and the hard-earned reward of delayed gratification.
That's not a bad deal at $16.25 per week.