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.
Instead, “giving the kids their allowance” now often entails untangling a complex web of electronic transactions. It means figuring out which sibling blew $29.99 to download Season 4 of “South Park” on iTunes and getting someone to fess up for charging those Jay-Z ringtones to mom’s cellphone bill. Some parents find themselves taking on the role of bill collector and dunning their kids for reimbursement, while others are throwing up their hands and giving up on spending limits altogether.
My kids are 5 and 3, so we’re just on the cusp of having to deal with this problem. Aside from the issue of turning kids into consumers at an ever younger age, how are TPM parents handling the digital allowance?
