Yahoo Finance Live co-hosts Seana Smith, Rachelle Akuffo, and Dave Briggs reflect on the trend of rising allowances from parents amid inflationary pressures.
RACHELLE AKUFFO: Should your child's allowance keep up with inflation? Well, according to Family Finance at Greenlight, weekly allowances are up 3-- more than 3 and 1/2% compared to this time last year, making the average allowance now $12.76 a week. So Seana, what's your stance on giving out allowances? My daughter is nine. She doesn't get an allowance. It would all go to candy and Roblox. So, no.
SEANA SMITH: You know, Rachelle, I was polling the newsroom ahead of the show because I never got an allowance. I never really understood an allowance. I think Dave is going to disagree with me on this one. So I get, I guess, why people are raising their allowance because people are-- because their kids, whatever they're buying, costs more.
I just don't really get the incentive. Like, if your child needs something, then you'll buy it for them, right? Necessity. I think it's all about the luck of when you ask your parents for something growing up. At least, that's what I tried to do, time it right. But I don't know. Does this make sense to you?
DAVE BRIGGS: Your kids are young.
SEANA SMITH: My kids are young.
DAVE BRIGGS: Your kids are very young. I have a 16 and a 14-year-old, and this is all about a teachable moment. And I sat down with my kids while we were in Disney World last weekend. And my son looked at me like I had nine eyes and said, Dad, what is inflation? And I said, you do know we're paying more for everything today, right?
I was astonished to hear my kids say they had never in school once heard of the concept of inflation or what it means to them or what it means for household expenditures. So I hope this is a moment that parents teach their children what we're all going through as adults so they can understand when you have to make some sacrifices. To my delight, they said, why don't we have one hotel room instead of two?
SEANA SMITH: There you go.
DAVE BRIGGS: We took them up on that.
SEANA SMITH: Now they're saving you money. So it sounds like you--
DAVE BRIGGS: It was a home run.
SEANA SMITH: You really got the message-- you hit a home run there.
DAVE BRIGGS: Financial literacy-- this is a whole side tangent, but really needs to be taught in our schools.
SEANA SMITH: It does.
DAVE BRIGGS: It is terrifying. I will say that it makes sense that it's up, and it's up, in particular, over 17, 18, and 19-year-olds, Rachelle.
RACHELLE AKUFFO: Well, I was going to say that I make mine goal oriented. If my daughter says she wants something, I ask her, OK, how do you plan on earning that?
SEANA SMITH: I like that.
RACHELLE AKUFFO: We make it goal oriented, as opposed to sort of giving out allowances. It's a good mindset to have.
DAVE BRIGGS: I like that.
SEANA SMITH: I'm going to be asking you guys for all the tips as my boys get a little bit older. All right--