Teens who received no-strings-attached allowances scored lower on financial-literacy tests than did teens who didn't get allowances and those who had to work for the money, according to an analysis by Lewis Mandell, a former business dean at State University of New York in Buffalo. Other research has produced mixed findings on the topic of allowances and financial literacy. Mandell says the key element, whether allowances are given or not, is parental involvement in their children's financial education.

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