How Much Should the Tooth Fairy Pay?

When we were growing up, losing baby teeth was a major deal, because doing so meant getting paid.

We would stick that wayward chopper under our pillow, and wake up the next morning to find the Tooth Fairy had left a shiny quarter, or possibly even a crisp dollar bill, in its place.

While most of us probably never got a decent explanation as to why the Tooth Fairy needed all those teeth (nourishment, perhaps), we didn’t object because even back then, we knew having money was better than not.

Now that we’re grown, and now that many of us have kids of our own, it’s good to check on our friend the Fairy and find what her going rates are these days.

As it turns out, losing teeth is big business these days, and children know it.

The National Average: $3.70 per Tooth

A recent survey conducted by Visa for their Tooth Fairy Personal Finance App revealed that, on average, kids today receive $3.70 per tooth.

Not a bad payday for an age group where parents still foot the bill for everything.

And before you blame simple inflation, just know that $3.70 is way higher than the average rate.

One dollar in 1990 is worth $1.78 in 2013 dough, which you might recognize as being much lower than $3.70.

Going back further in time, $1 in 1980 is worth $2.83 today.

In fact, a dollar doesn’t become worthy of today’s teeth until 1977 (their dollar is worth $3.84 today).

If you were raised on a quarter per tooth, you need to travel way, way back to justify paying $3.70 — a quarter in 1931 is worth $3.83 today.

So unless you’re having kids extremely late in life, inflation is not the issue.

The issue appears to be more that parents are abandoning their own personal Tooth Fairy budget the second Junior starts to feel left behind.

Kids will go to school, proud of the dollar they just got for that bicuspid that fell out over the weekend, and come home in tears because they found out their best friend got $5.

Obviously, parents don’t want their children to feel like they’re worth less than other kids, but instead of finding other, more cost-effective methods of making them smile again, they instead “have a talk” with the Tooth Fairy.

Then, with the next lost tooth, pay suddenly increases to five or possibly ten dollars. That Tooth Fairy sure is a good listener.

Toothy Trends

While part of it has to do with region (kids in the Northeast United States already pull in $4.10 a tooth on average, while Midwestern kids only get $3.30 a tooth,) toothy price tags all over are high, and they’re only going to get higher.

In 2011, the average Tooth Fairy payout was a mere $2.60. In two years, it went up over a dollar. There’s no reason to not believe that the 2014 figures will reveal an average payout of $4 or more.

But there is some good news — the Tooth Fairy App does report that about 33% of kids still get a dollar or less per tooth.

So some of the blame for high averages can be attributed to some parents who give their child anywhere from $20 to $100 for a lost tooth.

It’s kind of like how technically, the average salary for Philosophy majors is sky-high, because Steve Martin was a Philosophy major.

But it’s not all due to some kids earning higher salaries than their parents. For the majority of families, it’s just the way things are now.

Losing teeth can net kids big bucks, and the bucks are only going to get bigger.

If you catch your child in time, and continually remind them that money isn’t everything and their worth as a person isn’t tied to how much the Tooth Fairy leaves them, then you should be able to keep your Fairy bill quite low.

Just not “quarter per tooth” low. That Golden Age ended a long time ago.

Mary Hiers is a personal finance writer who helps people earn more and spend less.