If you've spent much time in online parenting groups, you've probably seen arguments raging out of control over the subject of allowances. Should kids get paid for chores? Should parents give kids money with no expectation of work? Is making kids do chores for allowance exploitative? And how much money should a child get for their allowance?
A recent survey, performed by the American Institute of Certified Public Accountants (AICPA) found that on average kids today get around $30 per week in allowance from their parents or guardians. When broken down to an hourly rate, kids today are making around $6.11 per hour worked (which is up from $4.43 in 2016) when kids are working around 5-5.5 hours per week doing chores and helping parents around the house.
The vast majority of parents believe children should receive an allowance. And while 52% of respondents said that no portion of the allowance should be gifted—all money should be linked to work performed—a smaller percentage (27%) believes a portion of allowance should be gifted.
Only 3% of respondents, however, said their kids saved their allowance. The majority 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 believed the most important part of providing an allowance to their children is to teach them the value of money and saving—which is blatantly inconsistent with what kids are actually doing with their money.
Surprisingly, 7% of parents say they've never taught their children about money or financial literacy. However, 92% of those surveyed believe it's important to teach children about managing their finances before they leave home.
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"One of the best gifts we can give our children is a solid education on how to manage their money," said Gregory Anton, CPA, CGMA, chair of the AICPA's National CPA Financial Literacy Commission, in a press release. "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."