At Right About Money, we are big believers in paying young people allowance as a means for teaching them to handle money responsibly as they mature. Not everyone is on board. One expert even calls paying allowance to youngsters “cruelty” if it is not accompanied by a discussion. But most adults find value in the exercise. They mostly debate whether allowance should be tied to chores or doled out regularly no matter what.
Now comes another issue. The nature of money itself is evolving. That is perhaps clearest in the rise of Bitcoin and other “cryptocurrency.” It is also notable in the popularity of e-payment systems like Apple Pay, Venmo and PayPal.
Kids need to learn about money in the form they will most often use it: digital accounts and plastic. It seems much too early in the evolution of money to pay kids allowance in Bitcoin, and the venerable piggy bank still has relevance for the very young. But in an increasingly cashless society a physical piggy bank and even physical coins and bills are fast becoming relics, like the typewriter and buggy whip.
No matter how you disperse allowance, it remains an effective tool—and the amount and the discussion that go with it remain paramount. To that end, we are encouraged by the accompanying graphic, which shows that kids, on average, get more allowance as they age and the amounts seem large enough to matter but not be excessive.