We know this thanks to surveys commissioned by the American Institute of CPAs. In 2016, kids worked 5.3 hours per month and made $4.43 per hour. In 2019, those figures were 5.1 and $6.11. That’s a big raise, a raise way bigger than the one their parents received in the same period of time.
The Bureau of Labor Statistics reports that the average hourly pay rate for all Americans increased by just 10.5 percent from 2016 to 2019, from $25.43 to $28.11.
So kids make, on average, about $120 per month in allowance. The survey also found that four out of five parents expect their kids to work at least an hour a week to earn an allowance.
For parents who want their kids to have some money in their pocket and do some chores to help out mom and dad, this is all pretty good news. But for the 92 percent of parents who believe it’s very important for their kids to understand how to effectively manage their money, the outlook isn’t quite so rosy.
We know this because saving is one of the most important financial lessons parents can teach; rare is the kid who needs to be encouraged to spend their money on frivolous things.
And even though parents are spending time talking to their kids about finances, just three percent of them say their kids primarily save their allowance. Ninety-seven percent of kids are mostly spending their cash, usually on outings with friends, digital devices or downloads, toys, and/or clothes and shoes.
Should American parents be getting raises at a higher rate? You bet, but that’s a different story. This survey is really about how families pass on financial lessons, and it’s clear there’s a lot of room for growth. A good place to start: make sure kids who receive an allowance are ready for the responsibility.