Kids’ Allowance Moves Online

It used to be that parents handed kids cold hard cash for allowance. Thanks to the popularity of web and mobile apps, tools like,, and now allow parents and kids to track and send their allowance online.

Melody Warnick, a mother in Blacksburg, Va., turned to MoneyTrail to manage her two daughters’ allowance after getting frustrated with cash and an old-fashioned checkbook. “The typical handing out cash didn’t work for us because I would forget or if I did remember, the kids would lose their money,” she says. “A year or two ago, we had started using an old checkbook but that turned out to be a pain because I wouldn’t always have it with me when they wanted to buy something.”

Using MoneyTrail, Warnick set up an auto-deposit into her daughters’ accounts each month and created other accounts for sharing and saving. “We do tithing so 10% of their allowance automatically gets transferred into that share account and 20% goes into the save account,” she explains. “This way, we know at a glance how much money each kid has at any given moment.” Now when Warnick and her daughters are in Target and one asks to buy a Barbie, Warnick pulls out her phone to find out on the spot how much spending money each daughter has.

While online allowance trackers are convenient and certainly many transactions are going paperless, some experts warn that kids still need hands-on experience with paper money. “It’s something they can feel and touch,” says Gail Perry-Mason, author of Girl, Make Your Money Grow! and founder of Money Matters for Youth, a week-long summer program aimed at teaching kids responsible money management. “When we are able to feel and touch something, we become emotionally attached to it. This way we learn more respect for money.”

As part of kids’ financial education, Perry-Mason suggests showing them how to make change and discussing which presidents are on which bill. Writing the kid’s initials on a bill can also encourage them to save that bill, she adds.

“I would start out with the actual money,” she says. “Then move online and still a balance of both. Sometimes if we go to the store with an ATM card versus having cash in our pocket, we tend to spend less if we use actual cash. The same thing can go for kids. When kids know they only have $5 to spend in the store, they won’t overspend.”

Either way, it’s important to discuss financial priorities and help kids understand the opportunity cost that comes with every purchase. For Warnick and her daughters, MoneyTrail helped create a dialogue about how they choose to spend their money. “We actually make them spend their own money on things and it comes up more often because before we would have just said no and now it always comes down to ‘do you have enough money for it?’” she adds.

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