Why Digital Allowances Aren’t Too Far-Fetched.

Print Friendly

In the midst of the online cultural shift that we’ve seen in the last five years, it’s no secret that online shopping is becoming more of a social norm every day.  Though online shopping can be extremely convenient and user-friendly, it can also pose a whole new set of rules and guidelines that parents have to be prepared to teach their children; after all, our children were born into this sort of thing.  Whether its real items like clothes and books or virtual goods like digital songs and games, it suffices to say that online shopping has given a whole new meaning to “allowance”. 

I think that Ted Sorom from Rixty.com made a good argument about this in a recent Businessweek.com article.  In the article, Sorom claimed that parents should give their children a “digital” allowance in the form of a debit card or a prepaid credit card.  I think he made a good point when he said that “teens have vibrant online lives” and that a lot of the things they want they can’t get in an actual store.  And it makes sense when you think of all of the digital goods that children are surrounded with these days: MP3s, clothes, digital books, mobile apps, digital video games. 

But the backbone of Sorom’s argument was his claim that by giving teens and tweens a digital allowance, parents can essentially take the cash they were going to give their child and just give it to them in the form of a debit card or prepaid credit card/voucher.  This will allow them the freedom to purchase things online, virtual or real, and at the same time limit their children to a set amount of money that they’ve earned themselves. 

I think that Sorom makes a very sound argument.  This will not only allow parents to compromise with their kids’ online shopping desires, but it will also act as good practice for proper financial budgeting and credit card etiquette in their future. 

In addition to Sorom’s argument, I think that five or 10 years ago I would’ve been a bit more hesitant with advocating for a child having a debit card.  But I think that the business of e-commerce has improved vastly over the last 10 years and even more so in the last five.  With that said, I think it’s safe to say that the idea of a digital allowance isn’t one that’s too radical to consider.  I think that it’s a step in the right direction to teaching our children the do’s and don’ts of the Internet while at the same time teaching them how to be responsible with their money. 

facebooktwitterpinterestlinkedinby feather


  • I like the idea of giving kids experience with different payment mechanisms (cash, debit, credit) as they mature. I’m not sure I’d tie allowance to one specific payment mechanism though. If you track allowance balances in a separate ledger, you can be flexible with respect to payment approaches and also get them in the habit of explicitly logging their expenses – a good intro to budgeting skills that they’ll need later when they’re on their own.

Leave a Reply

Your email address will not be published. Required fields are marked *