Democracy Dies in Darkness

Do allowances help children become good money managers? Maybe.

To instill good financial habits in your kids, it’s important to engage them on how to save and spend wisely — and by modeling smart practices yourself.

5 min
(Illustration by Kat Brooks/The Washington Post; iStock)
Column by

As the fall school season starts, I wanted to revisit past advice on giving children an allowance.

Does an allowance lead to money-smart kids?

Well, it depends.

When I was 4, I went to live with my maternal grandmother, Big Mama, and I quickly learned how to distinguish between a want and a need.

A want — “Big Mama, can we go to McDonald’s?” — would land me a lecture. Every. Single. Time.

Big Mama talked incessantly about saving, spending wisely and staying out of debt. She was so tight with her money that if she held a penny, the Lincoln on the coin would scream.

And she was the best financial teacher I would ever have.

Once, when I was maybe 10, a relative gave me $10 for Christmas. I looked at the bill and immediately thought, “Wow, now I have money to buy presents next year.” And that’s precisely what I did.

Under Big Mama’s tutelage, I became good at managing money, and she did it without ever giving me or my siblings an allowance.

I am not saying an allowance doesn’t matter, but the absence of this teaching tool also doesn’t automatically result in raising a spendthrift child. It’s worthwhile if it’s delivered with the values you want to instill.

Skip to end of carousel