A new survey published by the American Institute of Certified Public Accountants earlier this week reveals some surprising findings about how much kids in the US are earning in allowance, and how much they’re (not) saving.
The survey of around 1,000 people found that two-thirds of parents give their child an allowance, which comes to $30 per week on average. Four out of every five parents who give their kids an allowance expect them to earn it through some type of work like household chores. In fact, the average of 5.1 hours per week of chores reported by the survey participants works out to an hourly rate of $6.11 in allowance earnings per child.
So kids are earning more money than ever, but are they saving it? Actually, only 3 percent of parents said that their kids primarily saved their allowance money. The vast majority of allowance money is spent on outings with friends and digital downloads such as games or music.
3 Tips for Teaching Kids About Money
It’s never too early to start teaching them kids managing money. An allowance can be a valuable learning experience for kids of all ages. These tips can help parents approach the process with a helpful strategy:
- Right from the start, encourage your child to divide their allowance into share, save, and spend categories. The sharing chunk can go to a charitable cause your child chooses. The savings category is a stash for future purchases. The spend category is for things they want right away.
- There are apps that both parents and tech-savvy kids can use to help manage and track their allowances, like bankaroo and iAllowance.
- There are also tons of books for every age group that teach the value of money and saving. Some classics include The Money Tree for ages 5-8, and The Lemonade War for ages 7-10.
