Nearly seven in ten parents (68%) currently give their children an allowance, and the children are working for it, according to a survey by the American Institute of Certified Public Accountants CPAs (AICPA).
Children are spending an average of approximately six hours a week on chores to earn their allowance. The average hourly rate of “pay” comes out to $4.43 an hour, which is a 16% raise from the $3.82 they were making in 2012. On average, children currently receive $67.80 per month ($814 per year) in allowance.
Fifty-seven percent of American adults reported they received an allowance when they were growing up. Of those, the vast majority (90%) say they had to do at least some chores to earn it, and of those who did, 70% say they had to earn every last penny. Only 10% received their entire allowance as a gift.
Nine in ten Americans (92%) agree that allowance serves a purpose, with 81% saying that it teaches children the value of money and financial responsibility. Others cited giving children the ability to purchase their own things (9%) and letting kids afford to do many of the same things as their friends (3%). However, the AICPA says the onus is on parents to make sure that the lessons are sinking in.
“One of the ways that parents can use allowance as a teaching tool is to encourage their children to save 10% on a weekly basis and match the savings if they do. This simple, effective tool will better prepare them to contribute to a 401(k) account and take advantage of any matching offered by their employer,” suggests Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission.The poll was conducted by telephone within the United States between March 18 and March 27, 2016, among 1,005 adults (517 men and 488 women ages 18 and older).