Kids nowadays spend most of their free time on gadgets. Gone are the days when they go outside and play hide-and-seek or in the playground – something that’s disapproved by experts.
The advent of technology has paved the way for more advanced machinery, which means easier tasks and lesser labor, but it also meant that people became more and more independent of them.
Children aren’t immune from the devices as well and they, too, get hooked so much on these that screen time became a cause of concern.
Although kids are busy with their gadgets, there is one thing they are good at: saving money.
It’s pretty unbelievable knowing that they are just children who generally should be thinking about toys, school, and even their gadgets – in short, money is not their priority.
However, it turns out that they save bigger chunks of their money than the percentage of adults allot for their savings.
This doesn’t just say something about the evolution of how kids are becoming advanced with their thoughts, but it also says a lot about how they are more consistent and determined in setting aside some of their moolah even if these are only a meek of what the adults really earn.
Kids’ Spending Habits
According to a report from Rooster Money, which studied the money habits of kids from 4 to 14-year-olds in the United States last year, these children are given around $471 to spend on whichever they want in a year, that makes $9.06 a week.
It’s a relatively small amount for adults but don’t underestimate the children because 42 percent of their money goes to their savings.
For adults, meanwhile, the personal savings rate was only 2.4 percent in 2017 in the United States – with the figures, it is even easier to see the stark contrast between the spending habits of the two age ranges.
To be fair, keeping up with the kids’ percentage is hard because parents have to think about a lot of things, like those needed in the house such as food, clothes, and others.
Rooster Money previously monitored how much the parents are giving their kids as an allowance, and now, they changed things up a bit to see which chores equate to bigger money.
As per the report, on average, washing the car will make kids richer by $4.60, the top-paid errand; gardening placed second with $4.34; cleaning the bedroom, $2.71; mopping the floor, $2.33; and cleaning the bathroom, $1.82.
Kids are saving up for the following stuff, in order: phones, Lego, tablets, Nintendo Switch, and dolls.
Future Perfect Planning founder and financial planner Cristina Guglielmetti said that it is important to teach kids to save up for something expensive because that process inculcates to the child’s mind that sacrificing something now can help them afford something luxurious in the future.
Raises and Practicality
Like most adults, these children get “raises,” too, as they get older – which only makes sense, imagine washing the car and getting consistently only a dollar since you are 9 and now you’re 14.
Guglielmetti also agrees that parents need to check the amount given to the youngsters as they age, although she points out that there is no one way to do it.
As per the report, 4-year-olds get an average $3.97 allowance and by the time they reach 14, they already receive $13.34.
Furthermore, the financial expert advised that when you finally know how much to give your children for allowance, teach them to properly designate and budget it: save a third of the amount, the other third for whatever they want to buy, and the last portion for donating.
Parents can also offer other plans for their kids to save up on pricier stuff like new gadgets by encouraging them to set aside money for the half while you shoulder the other half. For their part of the deal, you can discuss the timeframe and the chores that will earn more.
Meanwhile, Guglielmetti noted that some kids may be spending less and saving more because parents actually don’t let their children spend on the things they want and instead, they buy it for them.
But parents need to be tougher when it comes to making their kids use their allowance for something they want because spending your hard-earned money has a different feeling and meaning than when things are given by other people. That way they will be more responsible for saving up for what they want.