American parents may not be getting enough pay raises to keep up with the cost of living, but one cohort of workers is: their children.
Children saw their weekly allowance increase a whopping 38% since 2016, while mom and dad continue to watch their salaries stagnate.
Young people now receive an average weekly allowance of $30, or $6.11 an hour based on a reported 5.1 hours of chores a week, according to a new survey published Tuesday by the American Institute of Certified Public Accountants, which polled 1,000 Americans. In 2016, kiddos got just $4.43 an hour from their parents.
Sixty-six percent of American parents say they give their children an allowance, and four out of five expect them to earn it. Kids may be earning their keep, but they’re certainly not saving their wages: just 3% of parents said that their kids save their allowance. So where is all that chore money going? According to moms and dads, primarily on outings with friends (45%), followed by digital devices or downloads (37%) and toys (33%).
Three quarters of parents say the purpose of an allowance is to teach children the value of money, and 92% believe it’s very important for their children to know how to manage their money, but only 32% teach their kids about money once a month or less, including 7% who say they’ve never talked about money with their kids at all. There is some hope for a financially literate Gen Z, however. Almost half of the parents polled said they teach their child about money at least once a week, and 34% say talking about money with their kid happens multiple times a week.
Those conversations may pay off in the long run: $30 a week adds up to about $1,500 per year — enough to buy a used car after a few years of diligent saving. So if you really plan ahead, mom and dad could be off the hook for an expensive 16th birthday present.