Parents Train Young Consumers

Marketing Charts: Parents Train Young Consumers

Marketers who target the youth market may be dealing with savvier consumers than they anticipated, according to the latest American Express Spending & Saving Tracker. Seventy-one percent of parents with children ages six to 16 say their children understand the US is in a recession, and 91% say they plan on teaching their children financial responsibility in 2010.

Top Three Savings Lessons Parents Teach Kids

The 91% of parents who plan to teach their kids financial responsibility this year rated the following three as the most important, in order of how many respondents mentioned a particular lesson:

• Understanding debt and its impact on saving and spending (30%).
• Teaching the value of a dollar through an award system like an allowance (25%).
• Basic teaching of how money is earned and used in everyday life (21%).

Kids Become Cost-conscious

Despite the reputation of kids as being selfish and not listening to what they are told, Spending & Saving Tracker results indicate that at least some American kids are hearing what their parents tell them about financial responsibility. One in five children (20%) has indicated to a parent that “maybe we shouldn’t buy that due to the recession.” Interestingly, kids of the affluent were most apt (31%) to suggest that a parent hold back on a particular purchase.

Allowances Represent Spending Opportunity

Marketers of toys, candy and other kid-friendly goods have an opportunity to capture allowance spending, according to the following figures regarding allowance habits of U.S. consumers:

• Sixty-two percent of parents in the general population give their kids a weekly allowance.
• Among the general population giving an allowance, the average amount is $12 a week, or $48 a month.
• Almost half (47%) of the general population giving an allowance expects it to be spent, rather than saved.
• Twenty-three percent of the general population giving an allowance places no restriction on how it is spent.
• Thirteen percent of the general population giving an allowance permits it to be used for non-essentials such as toys, movie tickets and games.
• Ten percent of the general population giving an allowance permits it to be used for essentials such as gas and lunch money. …

When I was in early grade school, I got an allowance contingent upon doing certain chores. One of those chores was keeping books and recording my income and expenses (using broad categories.) I had to present those books to get my allowance. That didn't continue into my teen years, but long enough to get into the habit of watching finances and understanding cash flow. I think I was about ten when my folks opened a savings account in my name where I could deposit or withdraw my savings.

What training did you have as a kid? What are you doing to teach financial responsibility to your children?