MILWAUKEE — A penny earned is not likely to be a penny saved for children today, according to survey results released Oct. 1 by the American Institute of CPAs (AICPA).
The AICPA survey found that kids are raking in an average of $30 a week or $120 a month on average in allowance, enough to save around $1,500 in a year. However, AICPA found just 3% of parents said their children actually save their monthly allowance.
The top three things kids spend their money on, according to the survey, are outings with friends, digital devices or downloads, and toys.
The survey found 75% of parents indicated the most important reason for giving their children an allowance is to teach kids about the value of money and financial responsibility.
Interestingly, while kids are earning 38% more than they were in 2016, the average amount of time they spend on chores each week was found to be on par with 2016 (5.1 hours in 2019 vs. 5.3 hours in 2016). On average, children are spending about 5.1 hours a week doing chores to earn their allowance, the survey found.
According to the survey, 86% of Americans believe kids should receive an allowance — most commonly saying every cent should be earned by completing chores.
AICPA found 66% of parents indicated they do give their children an allowance and/or spending money that doesn’t have to be paid back, and 80% said they must earn the money.
The survey involved 1,002 adults in the United States and was conducted by The Harris Poll on behalf of AICPA.
AICPA officials offered the following advice for parents looking to teach their children about money and financial responsibility:
1. Start Early
2. Set Clear Parameters
3. Use an Allowance to Talk About Budgeting
4. Discuss Impact of Impulse Purchases on Goals
5. Talk Often