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How does an allowance make kids more financially literate?

What is the significance of pocket money?

How does an allowance make kids more financially literate?
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StarsInsider
09/03/2026 08:00 ‧ 9 hours ago | StarsInsider

LIFESTYLE

Finance

The practice of giving children and teenagers allowances developed in the early 20th century, but the concept of rewarding youngsters with money has its roots in antiquity. As the idea of allowances evolved, so, too, did the realization that these token stipends could actually serve as a

tool for teaching financial responsibility by offering valuable lessons in money management. Kids could earn so-called "pocket money" by undertaking simple chores and, by doing so, gain their first sense of ownership and the idea of a "reward for effort."

Today, more emphasis is being placed on financial literacy that ever before, and the earlier a child learns about money the more likely they'll develop responsible fiscal habits. And it all starts with a few coins being handed over by equally responsible parents.

So, how do allowances make you more financially literate? To find out, click on and spend time browsing this gallery.

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