There is good news for kids looking to earn money: Household chores are becoming more lucrative.
The average pay rate for children who work to earn an allowance has spiked 38% in the past three years, a new survey shows, but three in 10 respondents talk to their kids about money only once a month or less.
The American Institute of CPAs (AICPA), a membership organization for professional accountants, surveyed 1,002 adults. Of those, 273 self-identified as the parent or guardian of a child 25 or younger who lives in their household.
A majority of parents (66%) said they give their child an allowance that is not required to be paid back. The average child, per the survey, earns $120 a month — or nearly $1,500 a year. However, most of the parents who give their kids money (80%) said they expect them to do some work around the house.
An overwhelming 92% of parents said they believe it’s very important for their children to learn how to manage money effectively, and many are putting time into helping their kids learn those lessons. Among parent respondents, 49% said they spend time teaching their kids about money at least once a week, while 34% said they have money talks with their children multiple times a week. But 32% said they teach their kids about money just once a month or less, which includes 7% who said they’ve never taught their children anything about money.
The average amount of time children spend doing chores for an allowance is 5.1 hours a week, according to the survey. At that rate, children receive, on average, $6.11 an hour — up 38% from $4.43 an hour in 2016. In fact, kids are faring better economically than their parents. The average hourly pay rate for Americans only rose by 10.5% in that time frame, according to data from the U.S. Bureau of Labor Statistics.
Most adults, the survey showed, believe an allowance does more than simply give kids an income stream. Three-quarters, or 75%, said the No. 1 reason to give an allowance is to teach kids how to manage money responsibly. Yet, many parents don’t appear to be insisting that children save, the survey found. Only 3% of parents said their kids primarily save the money they receive for an allowance. Instead, on average:
- 45% is spent on outings with friends
- 37% is spent on digital devices and downloads
- 33% is spent on toys
Teaching kids about money not only better prepares them for the future, but it can help the family reach financial goals together. For example, families who are paying down debt might include children in discussions about how everyone can reduce costs and prioritize spending. As children age, parents can introduce them to more sophisticated financial concepts. For example, children who are getting closer to adulthood might benefit from lessons about credit. Some parents may even use this time to help their kids get their first credit card.