New York (August 22, 2012) — The average allowance provides a child enough money in a year to afford an Apple iPad and three Kindles and still have money leftover – money they’re most likely to spend. Indeed, only 1 percent of parents say their kids save any of their allowance.
Parents Paying Kids: What the Survey Reveals
A national phone survey by Harris Interactive for the American Institute of CPAs (AICPA) explored how much parents pay their children.
It found that 61% of parents give their kids an allowance, and more than half — 54% — start by age eight.
The average allowance is $65 per month, or $780 per year.
Nearly half of parents with school-aged kids — 48% — also reward good grades, paying about $16.60 for every A.
Allowances Can Teach Financial Lessons
“These findings show that it pays to be a kid,” said Jordan Amin, CPA, chair of the AICPA’s National CPA Financial Literacy Commission.
“But parents should also teach financial sense along with those dollars and cents.”
He emphasized that earning, budgeting, and saving are lessons that help kids build strong financial habits early in life.
Kids Work for Their Allowance
Most parents — 89% — expect children to earn their allowance.
On average, kids work 6.2 hours per week on chores.
However, money is not a frequent topic at home.
Parents are more likely to talk about good manners (95%), healthy eating (87%), good grades (87%), and the dangers of drugs and smoking than about managing money (81%).
How Kids Spend Their Money
Children often spend their allowance on toys or outings with friends.
Parents usually cover other costs like sports, hobbies, mobile phones, and digital downloads.
Almost half of parents (47%) say they expect to support their children until age 22 or older.
“As parents, we all want our children to succeed,” Amin said.
“But one of the best gifts we can give them is the ability to manage money wisely.”
In addition to these tips, the CPA profession has a comprehensive financial literacy program—360 Degrees of Financial Literacy—to help Americans achieve long-term financial success. A robust Web site (www.360financialliteracy.org) is the centerpiece of the program with tools, calculators and advice to help Americans understand and manage their financial needs during 10 life stages, from childhood to retirement. Another program Feed the Pig, created in conjunction with the Ad Council, provides tools, tips and resources specifically for youth and young adults.
Methodology Harris Interactive conducted the telephone survey on behalf of the American Institute of CPAs within the United States between July 12 and July 15, reaching a nationally representative sample of 1,006 adults aged 18 and older by landline and mobile phone. Of these respondents, 268 qualified as parents of children aged 25 years or younger living at home with them. For full results contact James Schiavone at 212-596-6119 or jschiavone@aicpa.org or Jonathan B. Cox at 919-402-4499 or jcox@aicpa.org.
