What Parents Really Pay Their Kids In Allowance
Should kids get paid for chores? Arguments can be made for both sides. And what exactly is a fair allowance for children’s chores?
According to a recent Harris Poll, US kids are averaging $6.11 per hour ($30 week) to complete chores around the house. Approximately 1002 adults across the US participated in the telephone survey concerning allowances. The poll indicated that the hourly pay for allowances is actually rising faster than wages in America. which is up from $4.43 in 2016. It is estimated that kids are working around 5-5.5 hours per week doing chores and helping parents around the house to earn their allowance.
A majority of parents specified that they provide an allowance to teach their kids about financial responsibility and the value of money. The poll found that kids are spending most of their money on everything from digital devices to recreational activities with friends. Only 3% of respondents said their kids saved their allowance. The majority of allowances is spent on going places with friends (45%), digital downloads and devices (37%), and toys (33%).
One major finding showed that 3 out of 4 of those surveyed strongly believed the most important part of giving an allowance to their children is to teach them the value of money and saving, which is clearly inconsistent with where the kids are actually spending their money.
Surprisingly, the survey found that 7% of parents say they’ve never taught their children about money or financial literacy. However, 92% of those surveyed do believe it’s important to teach children about managing their finances before they leave home.
Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission said, “One of the best gifts we can give our children is a solid education on how to manage their money. Simply handing money over to a child without guidance is a missed opportunity. By making an allowance a teachable moment, parents will help instill money management skills in their child at a young age that will help prepare them for the important financial decisions they’ll have to make when they’re older.”
When it comes to teaching children about financial responsibility, AICPA encourages parents to start early and set clear parameters. Anton added, “When it comes to managing money, a child’s first lesson should come at home. From explaining how many quarters are in a dollar, to helping children start a savings account to watch their money grow with interest, parents have the opportunity to establish a strong foundation of financial knowledge for their children that will benefit them their entire life.”