The Teenage Economy

Photo: Olaf Blecker

I hate money!” the young girl blurted out, her cheeks flushed and quivering. And why not? Money is an issue that plagues New York kids much the way it does the adults raising them. Kids fret over not having enough money, they plot how to wheedle more, they organize social systems around who’s got how much. It’s brutal. Few, however, hate money for the same reason this girl does. Wiping her red-rimmed eyes, she added, “I wish I didn’t have so much!”

Listening to this, to her “distressed” friend, Caitlin Keating had to bite her glossed lower lip to avoid saying something rude. Can you hear yourself? Do you know how you sound? The other day you said that you and your sister were worth more than the Olsen twins! Caitlin and her friend are 15-year-olds, and they were chatting after Italian class at the Upper West Side private school where both are sophomores—a place where the kids loll about in nanny-ironed uniforms customized with Ralph Lauren and Louis Vuitton, a sanctum so dominated by money that to overtly acknowledge it is the ultimate taboo. And yet to Caitlin, it often seems like that’s all anyone does: kids hustling, kids obsessing, kids turning downright savage.

Take what had just happened: Throughout class, Caitlin had watched her friend—who came from a prominent billionaire family and was quite likely the most affluent kid in this affluent school—get chastised for being so wealthy by another student whose father worked as a fashion designer and wasn’t exactly living the hard-knock life himself. A charmingly laid-back girl, Caitlin says she has always felt older than her peers, secretly detached, and has a tendency to view her surroundings through a vaguely anthropological lens. She found the treatment of her friend to be unfair and—given that most everyone here had parents forking over 25 grand a year in tuition—ludicrous.

But she was annoyed nonetheless. Because despite her friend’s gilded existence—despite her trust fund, despite her penthouse bedroom with remote-controlled blinds, despite the fact that even her freakin’ cats had their own bathroom—the girl never had any money. Her allowance was a flat $60 a week, a pittance in this world. The girl’s wardrobe was heavily Old Navy. She’d even had a stint in public school. She was, hands down, the poorest rich girl in the city.

“It’s ridiculous,” says Caitlin, a few days after the incident, walking near Lincoln Center. “We go out at night, right? And I’m always paying for her cabs! We go out at lunch, and she’s like, ‘I’m sorry, I’m so broke! Can you buy me a Vitamin Water?’ Her mom’s obsessed with not spoiling her, but come on. Mooching off friends is the solution?” She pauses. All around her, parents and their kids drift in and out of stores, walking with identical struts, sporting identical clothes, spending with identical verve—squint and it becomes hard to tell the adults from the children. “And to say you wish you didn’t have so much money! What is that?”

Caitlin lets out a laugh.

“The girl owes me at least a hundred dollars!”

How Much Does a Kid Really Need?
The predicament of Caitlin’s friend is, for the most part, a perversion unique to extreme wealth—most kids, even in New York, would be thrilled to get $60 a week from their parents. And yet for all its cartoonish pseudo-tragedy, the outburst provides a glimpse into something more universal: the ever-more-powerful role that money—and allowances, in particular—plays in the life of a teenager. Think of the allowance as a metaphor for one of the cruelest ironies adolescents confront: Your ability to act like an adult is still controlled by adults. Talk to kids, and they’ll tell you—how allowances have an incessant way of creeping up on friendships, provoking ire and envy, how they simmer with the potential to stratify friends, even inside stratospheres where that isn’t supposed to happen.

Parents are oppressed by the subject of allowance, too. “I would say that money is the most uncomfortable thing to talk about,” says a parent who’s putting a kid through private school on a salary not designed for such a burden. “Parents are more willing to call each other up and say ‘I understand there was drinking at your house’ or ‘I hear that eighth-grade girls are having sex in the locker room’ than ‘Why are you giving your kid so much money?’ ”

The issue goes beyond just how much money to give a kid; you’ve got to consider how to give it, which raises thorny questions. Credit or debit? Should it be connected to chores? What about cash bonuses for good grades? At what point does responsibility start to repress? When does comfort veer into corruption? Sure, giving kids credit cards means you risk watching them morph into chronic shoppers, but cash might turn them into coke fiends—so what’s the lesser of two evils? “That’s the real reason a lot of us have credit cards now,” says a junior at an Upper East Side private school. “I didn’t ask for one—my parents just don’t want me to be able to buy drugs.”

Data on allowances is hard to come by. But conversations with dozens of teenagers from public and private schools yield some rough approximations: They describe a typical New York allowance to be in the neighborhood of $20 a week, depending on whether the money is given as a simple token, a reward for specific work, a means of quieting a whiny kid, or a way of fostering self-sufficiency, requiring the child to buy his own clothes, groceries, and school supplies. Kyle Brandt-Lubart, a 16-year-old sophomore at Bronx Science, receives $45 a week, a figure she and her mother arrived at after making an extensive list of what she spends money on: clothing, transportation, food, going out on weekends. “I think it works well enough,” she says. “I learn to manage money, even if it’s on a small scale. At the same time, I’m supposed to save $5 a week, but that never actually happens.”

And then there are the private-school kids, who—shocker!—get substantially more, between $100 and $300 a week on average, often in a combination of cash and credit and debit cards. (Such arrangements are thoughtfully facilitated by corporate America. Visa offers a card called Visa Buxx specifically designed for parents to give to kids; last year, MasterCard came under fire for issuing a Hello Kitty debit card that to some seemed targeted toward toddlers.) But these sums, while exorbitant, aren’t always being lavished on spoiled kids. Take Peter, a junior at an Upper West Side public school: He receives $100 a week from his mother, but he has to work for it—cleaning the hallways of the downtown apartment building his family owns, which alienates him from his friends, who are given money just for breathing. Not long ago I had lunch with a junior at an East Side private school who was paid an actual salary by her parents: $16,000 per year in quarterly payments, the figure increasing as she gets older; if she goes over, that’s her problem. “It’s supposed to help me understand responsibility,” she told me with a shrug, adding that while she “guesses it does,” the fact is that her parents still tend to pay for her clothes, food, transportation, everything. Which means the $16,000 ends up being something of a token. “I have stocks in some company, too,” she says, “and my dad keeps saying he’s going to explain it to me, but one of us is always too busy.”

Caitlin Keating at a friend’s home on New Year’s Eve. (Photo credit: Michael Schmelling)

Allowances tend to be greater for girls, mostly because they experience more intense peer pressure about clothes and shop more. Guys tend to be the ones more interested in making money— and they have no problem borrowing from girls. “If I need money—like for lunch, a video game, whatever—sometimes I’ll just ask a chick,” says a private-school senior. “They’re usually cool about giving it out.”

Janet Bodnar, who writes a weekly column about kids and money for, argues that parents ought to enforce a strict allowance in order to teach money management. But she and others who study familial financial patterns say that fewer and fewer are heeding that advice. “A lot of parents, especially today, are inclined to just hand out $20 whenever kids need it,” Bodnar says. “And the kids don’t learn anything that way.” According to the JumpStart Coalition, a nonprofit that raises financial awareness, only 52 percent of high-school students have a working understanding of money. “For all our sophistication toward money, we enforce less and less real-life education on the topic,” says Laura Levine, the group’s executive director. “We give credit cards at younger ages, but with no explanation of what any of it means.”

Experts blame a baby-boomer mind-set, a generation that favors spending over saving, a group of adults who never really wanted to be adults. Bodnar says that a variety of factors have contributed to the emergence of a new sort of pervasive parental guilt, which, no matter the income bracket, is often appeased by cash handed out indiscriminately. “Maybe they’re not around as much—both Mom and Dad are working all the time, or going through a divorce, or dating, and they feel horrible so they’re buying their kids off with money,” she explains. “They say they’re doing it for the kids, but really, they’re doing it for themselves.”

And then there’s the changing philosophies toward work. It used to be that in most households, when kids reached a certain age—16, say—they were required to take a job, usually doing something unglamorous like busing tables, regardless of what their parents could afford to give them. Now the dominant attitude is that managing the stress of hypercompetitive schools, combined with hours at the SAT tutor, combined with the grueling schedule of after-school activities, adds up to a job in itself, and that working on top of all this is too much. Of course, plenty of families don’t have the luxury of making this choice; for these kids, a job is needed to make up for what their parents can’t afford to give them.

There are no longitudinal studies on the history of allowance in America, but Bodnar suggests that it became a component of the culture in the late forties, when the flush peacetime economy eased memories of the Depression. “It was more of a token in the beginning, not so thought-out,” she says. Back then, kids didn’t really need money, because there wasn’t much to spend it on. Then came the hamburger joints, the record shops, and eventually the omnipresent mall culture. Allowance became a necessity, and parents conceived of it as a way to help kids understand money. But somewhere along the way—as adults came to see their children as their peers, as kids started spending more and with greater savvy—allowance began to seem passé, quaint, a relic of a bygone era. The current situation is one of chaos and improvisation, parents throwing up their arms, hoping for cures to the very problems they’ve created. And the kids? When they’re not dreaming up ways to fleece their parents for a greater allowance, they’re busy working out their own solutions.

The $15,000 Credit-Card Bill Arrives in the Mail …
This can’t be right,” the concerned mother huffed, her brow furrowed, lips pursed. “Please tell me this isn’t right.”

Elyse closed her eyes, took a deep breath. In her hands she held her daughter Mary’s credit-card bill, which contained, in that grim little box at the bottom right-hand corner, a figure just south of the annual tuition of the private school Mary attends. (Both mother and daughter asked to be referred to by their middle names.) Elyse was aware that her daughter was a bit “vulnerable to the insane material pull of life in New York,” as she puts it, a pull that Elyse—originally from the Midwest, an Army brat educated in public schools, now a self-made designer who ended up far more successful than she’d ever imagined—finds somewhat upsetting. But this … this piece of paper in her hands … this was something else entirely. Epic. Ridiculous. Outrageous. What 17-year-old spends $15,000, in just a few weeks? And the bulk of it at clubs and restaurants with names like Marquee and PM? And then, finally, the most sour question of all spiked through Elyse’s mind: Could I really be the parent responsible for this?

“Texas” Hold ’em has become the most popular way to take an allowance and double it, triple it. or watch it disappear entirely.”

It just didn’t make sense. For one, Elyse’s other daughter was growing up to be “a total penny-pincher” who happily received about half the allowance of her friends. And, generally speaking, Elyse has always taken what she considers a reasonable approach to Mary’s finances: She wants to prevent her daughter from feeling alienated without spoiling her—a balancing act that most parents here can relate to. “Money is a constant topic, often one of contention, in our house,” says a father raising two teenage girls in what he refers to as the “nauseating 10128 Zip Code.” “You want to make your kid feel normal, but the problem is that ‘normal’ in New York is never quite normal.” Or, as another parent puts it: “On one hand you want to be strict, but at the same time you don’t want to think of your child sitting there at dinner, nursing a Coke because he can’t afford to eat where his friends want to go.”

And with the cost of New York living always on the rise, parents struggle to convey that money is more than an abstraction. “The discrepancy between my generation and my parents’ is enormous,” says a father who grew up in Stuyvesant Town in the fifties and who now raises two daughters in a middle-class Brooklyn home. “You used to be able to teach a kid the value of a dollar. Now the whole notion of teaching budgets can feel meaningless. The value of money changes so fast that it’s impossible for your kid to have a stable relationship with it.” Parents are also inclined to shield their kids from some of the harsh realities about money, creating some pressures while concealing others. “I give my 15-year-old son $10 a week,” says one mother. “He’s always saying that it’s pretty measly, but what he doesn’t know is that it’s all I can afford.” Among private-school parents, a rarely acknowledged fact is that many of them rely on their own parents to help pay the tuition. “It was quite a realization for my husband and I when we realized we were among the minority shouldering it all ourselves,” says one mother. “Kids pick up on this, too. They start to assume that getting help from mom and dad is a normal part of life.”

The anxiety surrounding the issue became especially evident when I posted a query about allowances on Echo—an Internet community favored by the city’s intelligentsia. The responses were both quick and cutting. Sample exchange:

Echo Parent 1: Our kids will get credit/debit cards only when they can pry them from our cold, dead fingers.

Echo Parent 2: honestly, i don’t see what the difference is between giving a kid cash and giving them a debit card. personally, i think i might prefer the debit card … there’ll be a record of the kid’s spending history, which would be useful for the kid to review at the end of the month, too, not just for parents who want to check up on them.

Echo Parent 1: I guess as a geezer, the whole idea freaks me out.

The message boards at, a cybercommunity of perfectionistic parents, are often dominated by debate over the Allowance Question as it concerns children barely out of diapers. In one amusing exchange, someone who believes a 7-year-old should get $3 a week—“one to save, one to spend, and one to charity (street musicians, people on the street asking for a handout, or the counter-tip jar at our favorite bakery)”—goes head-to-head with a fellow parent who thinks $7 is the way to go, connected to household work: “We give $7. She has seven chores, some daily, some weekly. But we don’t buy the small stuff anymore. She has to decide what she’ll spend her money on.”

Most curious about this particular site, however, is something else: For every post about kids and allowances, there is a nearly equal number of wives complaining that their “DH’s”—darling husbands—don’t give them enough allowance; also prevalent, if not quite as common, are working women wondering if they’re giving their spouses enough of an allowance. Such dilemmas, for all their eye-rolling absurdity, reveal just how contentious money matters are inside a family—in some households, parents and children end up competing with one another.

Which brings up another cultural shift: In a world where adults seem more and more like supersize children, kids have become increasingly adultlike, with more adult wishes and wants. When confronted about her credit-card bill, Mary couldn’t bring herself to tell her mother how she envied her—her clothes, her meals with friends at sleek restaurants, her “whole elegant thing,” as she told me. The credit card gave her a chance to emulate this lifestyle—spending felt, in many ways, like the least rebellious act in the world. Not that this is an excuse. “I’m so ashamed,” she says of the ordeal. “I don’t even know how to talk about it without sounding obnoxious, but please understand that this wasn’t me.

I was at summer school at Yale, sitting in class, when my mom calls. She says to me, all worried, ‘Honey, someone stole your credit card and spent $15,000. At … clubs!’ I’d basically stolen my own credit card and was spending like a thief. I wanted to write her a letter apologizing before the bill came, but I chickened out.”

Once the anger subsided, Elyse found that she could, to a degree, sympathize with Mary. “We live in a Manhattan microclimate that has become so entitled that it’s really hard to instill a system that actually does what it’s supposed to do,” she says. In the early eighties, Elyse moved her family from the Upper East Side to Chelsea to avoid the ubiquitous materialism; by the nineties, Chelsea seemed a lot more like the Upper East Side. “Mary wanted to impress her friends by spending all that money,” she says. “She still won’t tell me who she was with. I hate to pull the whole ‘when I was a kid I walked twenty miles in the snow’ thing, but the fact is that everyone worked. It was part of growing up. All the seeds of what I’d need to be self-sufficient were in place before I was an adult. These kids don’t have that.”

In the end, Mary was given a debit card, which has a set monthly limit. “She can spend that money however she wants,” says Elyse, “and if she runs out before the month is up, it’s her problem.”

The matter, however, continues to reverberate in the house. “My husband—he comes from a very middle-class background, he always worked from the time he was 12—finds it all very worrisome,” she says. “He especially doesn’t understand the whole New York thing. He’s always asking Mary what she’s doing for the human race and how’s she going to support herself. He just can’t process the lifestyle choices of the kids she knows. I have to say, knowing what I know now, the way money dominates this city is a reason to raise kids somewhere else.”

The Hilton Effect
While leaving the hot-money climate of New York City might help a little, you’d need to retreat into a dark cave to escape a pop culture that worships at the altar of youth and money. VH1 airs a show (seemingly every hour) called Fabulous Life Of, which picks over the ostentatious spending habits of celebrities, many not yet out of their teens. Last year, MTV had a hit with Rich Girls, a reality show about the fabulous life of Tommy Hilfiger’s teenage daughter, Ally, and her friends, which was especially strange for kids in the city: You knew those girls, or at least knew someone who knew them, which can feel like the same thing. With all this comes a cognizance of wealth among kids that adults rarely know how to deal with. When a Horace Mann student wrote an article for the school paper identifying a certain irony of the presidential election—that while most parents seemed to support Kerry, they’d be better off voting for Bush given their income bracket—the story was killed. That the argument was almost certainly true was beside the point. The extraordinarily wealthy, according to the school’s apparent logic, were not supposed to think they were extraordinarily wealthy.

The problem is that enforcing such an old-school omertà code comes off as ridiculous in an era in which Wasp culture’s reigning princess is Paris Hilton. To adults, she may be sleazy, tragic, incomprehensible; but what fascinates kids is her business savvy. She not only has money; she’s made it seem like a kid can make some serious cash doing just about … anything. And generating your own income means being able to skirt parental control.

Public-school kids describe a whole black-market economy centered around kids’ selling cigarettes—buying them online in bulk from foreign countries, and then selling them for $5 and $6 a pack: cheaper than a bodega, but enough to turn a profit and supplement a meager allowance. “You can make a buck or two a pack,” says a junior who’s a prime cigarette source in his school. “Last year, I pulled in about $1,000.” Garrett, a Bronx-raised senior at a magnet school, spent last year trying to figure out how he could turn his entire savings—$2,000 given to him by friends and family since birth—into $20,000 by investing in penny stocks. “I hung out with friends whose dads worked in finance just so I could ask them investing tips,” he says. Most prevalent of all has been the rise of a curious money-making subculture: the after-school gambling ring.

The Vegas Alternative to Allowance
Yo, don’t be such a pussy!” the boy hollers, and for a moment he looks momentarily possessed: jaw tensing, nostrils flaring. “It’s just money!

The playing cards are fanned across the glass tabletop, and now here come the poker chips. Clinking, clanking, spinning, scattering—hypothetical money representing the actual cash, which sits safely inside a shoebox under the table, a couple hundred dollars or so, all of it originating from parental wallets. It would be hard to exaggerate the popularity of poker among teenagers: Ever since ESPN started covering the World Series of Poker as if it were the, uh, World Series, players like Gus Hansen, Doyle Brunson, and Dutch Boyd have come to be as admired as professional athletes, eccentric mavericks making a killing without, as Stephen Youdeem, a Fieldston sophomore, puts it, “selling out to the whole nine-to-five machine.” In both public and private schools, Texas hold ’em—the variation of poker played in the World Series, in which you’re dealt only two cards that can be played in any combination with the communal five—has become the most popular way to take an allowance and double it, triple it. Or watch it disappear entirely.

The boy doing the hollering is Chris, a fleshy, freckle-faced kid of 17. He’s just lost the past five hands to a wily 16-year-old named Raphael, who’s now threatening to cash out with the bulk of the winnings. (I was invited here under the condition that I not print last names.) There are about ten kids seated around the table in the basement of an Upper West Side brownstone. At first glance, it’s easy to make a snap judgment of the scene—moneyed kids being reckless with money they don’t know the meaning of—though the reality is more complex. Chris, for instance, is among the minority of kids attending school on financial aid—and needs the money he makes gambling to keep up with someone like Barry, the resident of the brownstone, who goes out to clubs most weekend nights, where he drops at least $50. (“I know that my parents can only give me so much,” says Chris, in private. “If I don’t win, I have to borrow money from friends.”)

“ ‘Knowing“‘what I know now, i’d say the way money dominates this city is a reason to raise kids elsewhere.’ ”

The stakes in such games can get high. A story made the private-school circuit last fall about a kid who won $40,000 playing online poker. That may be urban legend, but it’s not entirely implausible. Playing a few times a week, a crew like this can exchange as much as $30,000 in allowance money over the course of a school year. And while it’s tempting to think of gambling as a subset of juvenile delinquency, it’s fueled, at bottom, by something most parents wish for in their kids: a desire to be financially self-sufficient. Furthermore, a poker game can take some of the sting out of financial disparities among friends. When you’re sitting at the table, chips stacked before you, you’re no longer the kid who gets only x amount from Mom and Dad. You’re judged on your own ability and cunning.

Raphael gives in to Chris’s pressure and plays for another two hours. Problem is, Chris is off today and only continues to lose. By the time Raphael takes the entire pot, Chris is imagining himself alone, in his room, on Friday night, an empty wallet burning in his back pocket. On the stereo, the bass thumps—the Lox featuring Lil’ Kim—causing the chips on the table to vibrate. It’s the key to life, booms the chorus. Money. Power. Respect. Whatchu need in life …

“Yo,” shouts Chris, still visibly annoyed with himself, “can somewhat turn that shit off?”

The Party Profiteer
Part of the appeal of making money, for teenagers, is that it opens the door to adulthood, to freedom, to rejecting allowance as their sole source of income. Today’s kids have come to be defined by their ability to spend conspicuously—around $170 billion last year—and are targeted more precisely and ferociously than ever before. When you constantly feel yourself in the marketing crosshairs, you quickly realize that you’re a crucial component of an abstract, bustling economy. You have strange thoughts. You wonder how you can exploit yourself for personal gain.

It’s ten o’clock on a recent Friday night, and Max is growing itchy. Eighteen years old, pale, diminutive, and shrewd, a senior at a private school, he’s standing inside an enormous industrial loft—a loft that, dammit, should be teeming with kids by now. “I’m always nervous as hell in the beginning,” Max says, glancing at his watch. “I just want to know that my investment’s gonna come through, you know?”

Max promotes parties; it’s what he does. He took it upon himself at the end of last year to be the go-to guy in his school, borrowing $1,000 from his parents to throw his first one. They’re loosely connected to something school-related: homecoming, spring break, end of the year. Tonight’s party was to mark winter break, and to spice things up, Max decided that tonight’s event needed a theme: “business hos and CEOs.” “The guys have to wear suits and suspenders,” he says. “The girls—I don’t know. They need to look sorta like secretaries, sorta like hookers.”

The fiscal logistics to pulling off such a night are impressive. Earlier in the week, Max found the loft through a friend and rented it for $1,500. Through a connection at Columbia, he hired three university football players—$120 each—to work as bouncers. He printed the invitations on clear plastic paper, cutting them into one-inch squares—the better to hide them from teachers—and all week during school he sold kids wristbands for $20. He bought a few cases of Poland Spring bottled water. (It is rare that such events feature alcohol—Max never serves it—but those that do net an extra $1,000.) All in all, parties like this can gross between $3,000 and $19,000 for the kid in charge. Such affairs have become so lucrative that, this past October, an enterprising Horace Mann student printed counterfeit tickets for the homecoming party and did brisk business before the organizers got wind of the hoax.

Fifteen minutes later, the doors of the freight elevator open with a ding and a sea of girls spill out: a blur of carefully torn fishnets, hiked-up pleated skirts, overdone eye makeup. One young lady totters over to Max and opens up her pressed white blouse to reveal the letters CEO written across her breasts just above a black lace bra.

“Do I get a discount?” she asks Max.

“Um, no,” he sternly replies. “You know the deal.”

Within an hour the loft is packed with bodies; there’s a line of kids twenty deep waiting to get in, all reaching into their wallets and handing over $20 to the bouncers, who then hand the money to Max when he checks the door periodically. There are a few girls who by night’s end are crying in corners—standard-issue boy drama—but all in all the evening is a success. From time to time, Max stashes the money in a small safe hidden in a backpack. “It’s funny,” Max says, finally seeming somewhat relaxed, “I want to major in business—to be the boss of something legit one day, you know?—and I was gonna put these parties on my college application. They show that I’m serious, that I know what’s what when it comes to money. But then I thought it wouldn’t look good.”

And what did his parents think?

“Oh, they have no idea how huge these things get,” he says, smiling. Then, a moment later, he adds, “Well, maybe they do, actually. I’m supposed to get a $50-a-week allowance, but ever since I started throwing parties, they’re always asking me for cash.”

The Give
It’s not just what you give for an allowance, it’s how you give it. A primer.

The Ways & Means of New York Kids
A mini-poll on allowance.

The Teenage Economy