Children are raking in an average of $30 a week in allowance, enough to save around $1,500 in a year, according to a survey by the American Institute of Certified Public Accountants (AICPA).
The average monthly ‘salary’ among allowance earners is $120, as reported by their parents. The average hours of chores a week required by parents to earn an allowance has gone down slightly (5.1 hours in 2019 vs. 5.3 hours in 2016). The hourly pay rate for children who have to work for their allowance has increased 38%, rising from an average of $4.43 in 2016 to $6.11 in 2019. Across the same time span, the average hourly pay rate for all Americans increased by 10.5% ($25.43 in 2016 vs. $28.11 in 2019) according to the Bureau of Labor Statistics.
And, some children do not have to work for their allowance. The AICPA found that two-thirds of parents give their child an allowance or spending money for which the child is not required to work. Four out of five (80%) parents who provide an allowance would be quick to point out that their kids are not getting a free ride, as they expect their children to work (e.g., completing chores) at least one hour a week.
Three-quarters of Americans say the most important purpose of providing an allowance to children is to teach them about the value of money and financial responsibility. However, the survey found, allowance money is rarely saved. Parents say most of their kids’ allowance is spent on outings with friends (45%), digital devices or downloads (37%), or toys (33%).
The vast majority of parents (92%) believe it is very important for their child to understand how to effectively manage their money, and many appear to be putting in the work to develop those money management skills. Half of parents (49%) say they take time to teach their child about money at least once a week, including one-third (34%) who say the lessons/conversations occur multiple times a week.
Yet, only 3% of parents say their children primarily save their allowance.These are among the findings of a telephone survey of 1,002 U.S. adults conducted by The Harris Poll on behalf of the AICPA. The organization provides tips for teaching children financial responsibility using an allowance.
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