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.
Parents Follow Own Financial Advice
Parents are sometimes known for telling children to do as they say, not as they do. However, when it comes to financial advice, parents appear to be setting a good example through action as well as words. As reported in Retailer Daily, US consumers increased their earnings and savings at a rate beyond their spending in December 2009, according to the monthly Bureau of Economic Analysis Personal Income and Outlays report.
US consumers’ personal consumption expenditures (PCE), which essentially reflect consumer spending, increased $22.6 billion, or 0.2%, for the month. Meanwhile, personal income rose 0.4%, or $44.5 billion, and disposable personal income (DPI), which represents personal income less current personal taxes, also rose 0.4%, or $45.9 billion. Personal saving increased a strong 5.5%, or $27.9 billion, rising from $506.3 billion to $534.2 billion.
In addition, US consumers are setting a goal to save money during 2010, according to the January 2010 American Express Spending & Saving Tracker. Eighty-nine percent of the general population has set a clear financial goal for the year, and 83% has a specific savings strategy in place, with a goal of saving on average $14,000 by December 2010.
About the Survey: American Express Spending & Saving Tracker research was completed online among a random sample of consumers aged 18 and up. The research sample of 506 households with children ages six to 16 surveyed the general U.S. population, as well as two sub-groups – the affluent and young professionals. Interviewing was conducted by Echo Research between January 5-11, 2010.
Affluent respondents are defined as having a minimum annual household income of $100,000. Young professional respondents are defined as less than 30 years of age, having a college degree, and a minimum annual household income of $50,000.