American children take in an average of $30 a week in allowance, which could add up to a nifty $1,500 a year if saved. It isn’t.
Only 3% of parents in a survey released Tuesday by the American Institute of CPAs said their children mainly saved their allowance.
The Harris Poll conducted the survey by telephone within the U.S. in August among 1,002 adults, 273 of whom identified themselves as a parent or guardian of at least one child aged 25 or younger who was living at home.
Three-quarters of survey respondents said the primary purpose of providing children an allowance was to teach them about the value of money and financial responsibility. But allowance money is rarely saved, the results showed.
Forty-five percent of parents reported that their child’s allowance was spent on outings with friends, 37% said digital devices or downloads and 33% cited toys.
“One of the best gifts we can give our children is a solid education on how to manage their money,” Gregory Anton, chair of the AICPA’s National CPA Financial Literacy Commission, said in a statement.
“Simply handing money over to a child without guidance is a missed opportunity.”
Parents in the survey reported that children who perform required chores for an allowance earned on average $120 a month.
The AICPA noted that although the average hours of weekly chores required by parents to earn an allowance in 2019 were on par with 2016 — 5.1 hours vs. 5.3 hours — the hourly pay rate for children who had to work for their allowance has shot up by 38%, rising from an average of $4.43 in 2016 to $6.11 in 2019.