wasting bandwidth since 1999

Allowance 2.0

So, how do you pay your kids an allowance when they have so little use for cash?

The rise of digital entertainment has upended whole industries, from Hollywood to the music business. Now it’s striking at a touchstone of the American family: the allowance. Kids are pouring money into things that can’t be bought with cash — music downloads, cellphone ringtones and online videogames. JupiterResearch estimates teenagers spent $3 billion online last year alone. In many families, the upshot has been the demise of the weekly cash dole that parents have long used to teach kids financial responsibility and keep them from busting the budget.

Maybe it’s just the digital immigrant in me speaking but isn’t it amazing how much can be spent on stuff you can’t even touch? And American Idol hasn’t even started this year.

allowance, children


  1. Doug Johnson

    I still hold a joint checking account with my 20-year-old son. (He permits it since it is so easy for me to transfer money into, I believe.) I am amazed when I look at what he uses his cash card for – everything, including $.79 soft drinks. I don’t think he carries cash – just his card.

    A fellow immigrant,


  2. Kimberly

    My older niece (13 yo) gets an allowance. There is a set monthly amount. Then she budgets it. She decides she wants x amount for Itunes – that much is credited to her account. If she went over her limit on the phone the month before – she pays that bill first. Can’t pay it out of her monthy allowance – No phone for the month.

    If she wants to buy something on line – she pays the total amount to Sis and then sis will pay using her credit card.

    She is learning to budget better now than at University.

  3. Christian

    What comes immediately to mind is the ‘how are they paying for it? question in terms of a) gift cards (presents or self-purchased) or b) credit cards (theirs, mom/dad’s) to be able to get access to such a large non-cash realm.

    I’d like to get a survey of the # of teens with credit cards. Whether shared with mom/dad or not, or a debit card or not, I wonder what it’d tell us beyond the superficial assumption?

    Great post! Cheers, Christian

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