Over 80% of parents are “giving in” always or occasionally when kids ask for extra money beyond an agreed allowance, according to the latest poll from Northwestern Mutual Foundation’s financial literacy site Themint.org. Only 7% of those polled report never being given extra money beyond an allowance.
LENIENCY ACROSS GENERATIONS
There is a distinct trend of increasing leniency across generations. The poll results show that 63% of today’s kids 17 and younger are “always” given extra money when they asked for it, and 26% of children 17 and younger “sometimes” receive extra money when they ask.
However, older age groups indicated that their parents were much more strict when it came to receiving extra money. Only 12% of those 18 — 45 responded that they were “always” given extra money, 8% of 46 – 59 year olds, and 13% of those 60 and older.
Likewise, the number of those who were “never” allowed extra money steadily increases with age. Only 6% of the 17 and younger group reported “never” being allowed extra money, while that proportion jumped to 26% for the 60 and older group.
“We’re seeing a lot more leniency among parents today when it comes to providing extra money to their kids when they ask for it, and this easy money can create bad habits over time,” says Janie Schiltz, Northwestern Mutual director – life product, and parent of two. “Being disciplined with money early on is key to practicing good money habits later in life. Parents who say “no” – and explain why – will help their children better understand budgeting and prioritizing.”
WHAT DO KIDS DO WITH THE EXTRA DOLLARS?
Parallel to the shift in leniency, the types of things that kids want extra money for also changed significantly across the generations.
Overall, the most commonly selected reason why kids today ask for extra money is to buy tickets to a movie/concert/sporting event (40%), followed by food/drink (24%) or to buy a toy/game/phone (19%). Only 15% answered that extra dollars are spent on school/educational purposes, and 1% wanted funds to give to or participate in a charitable effort.
These findings were especially evident in the 17 and younger group, where 58% of kids wanted extra money for tickets to a movie/concert/sporting event.[Source: Research conducted by the Northwestern Mutual Foundation/Themint.org. 28 Mar. 2011. Web. 31 Mar. 2011.]