Giving an Allowance is NOT a Money Lesson

You read that right.

Just giving an allowance alone − whether from earning it through chores, projects, or simply handing it over − is not a money lesson that will make your child financially savvier than kids who never received an allowance at all.

And I'm not just saying that to grab your attention by sounding counter-grain.

There's real research to back it up.

The study where this information originally came from was by Lewis Mandell, who looked through all of the allowance studies from the last 50 years and found a really crazy outcome: kids who received an allowance were actually LESS financially savvy than kids who did not. EXCEPT, and this is a BIG exception, when parents talked with their kids about managing their money (on top of giving the allowance).

Kinda shocking research, right?

I mean, before pouring through a Library of Congress-sized room of research for Money Prodigy Summer Camp for Kids, I would've thought that kids who received an allowance would be about three rungs up on the ladder in Joan Miro's famous Dog Barking at the Moon painting from kids who never got to touch the green stuff.

T. Rowe Price found something similarly convincing about the importance of money conversations on top of allowances in their 2014 Kids & Money Survey. According to the results, Teachable Money Moments are uber important (the kind that I include on my FREE Money Prodigy Activities Calendar for August>>). That's because "parents who feel that their parents did a good job of teaching them about money have significantly higher opinions of their knowledge of finances and investing."

Ready to tie that allowance you're giving to actual money lessons and really knock it out of Minute Maid Park?

And not really sure if you want to give an allowance (or don't know where to start)? I've got a whole Parents' Resource Lounge inside the camp membership area where I created several resources for parents like you to get the guidance you need to make money management decisions for your kiddos.

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