Family-Centered Care: An Approach to Implementation

Edited by Sharon L Hostler, M.D.

Chapter 4

CHILDREN AND MONEY - INCOME AND EXPENDITURES

Editor: Sharon M. Danes, Family Resource Management Specialist, May, 1991

University of Minnesota Children, Youth & Family Consortium. Permission is granted to create and distribute copies of this document for non-commercial purposes provided that the author and CYFC receive acknowledgement and this notice is included.

Minnesota Extension Service, University of Minnesota, Home Economics

Children and money issues are being discussed more and more in recent years. Within this discussion there is little agreement either between parents, among sets of parents, or among professionals in terms of approaches to the issues. This research report highlights some of the critical issues related to the income and expenditures of today's youth.

Children today have economic power. A recent Rand Youth Poll estimated expenditures by youth ages 7-18 to be $56 million in 1990. This amount is up from $36 million spent in 1979. To put this amount into an additional perspective, during that same time period, the youth population dropped by 4 million.

Changing demographics in the U. S. have also had an effect on children as consumers. The greatest impact has been the increase of two-earner and single-parent families.

McNeal (1987) noted a curious fact; children from less affluent families have more spending money than children from more affluent families. Many children who live with only one parent have more money than children from two-parent families, especially children from "traditional" families where only one parent works. Children in "nontraditional" households are more likely to get spending money; they get larger allowances; and among the 9-to-11 year olds, they are more likely to earn their own pocket money (Stipp, 1988).

Children's main income sources are spending money (65 percent get some from their parents), an allowance (58 percent), and money as a birthday present (61 percent) (McNeal, 1987; Stipp, 1988). Youth Monitor, a nationwide survey of 1,200 children and teenagers conducted by Yankelovich, Skelly and White/Clancy, Shulman, Inc. for the first time during the winter of 1986-87, indicated that 10 percent of 9-11 year olds who have a job, work an average of four hours per week, earning about $8.

Children's average weekly allowance is $3, amounting to over $150 a year (McNeal, 1987). If you multiply this number by the number of children in the U.S., it amounts to $4.7 billion. Children spend much of this money, saving only about half a billion dollars a year.

The increasing number of working parents and one-parent families also affects what children buy and the kind of shopping they do. Teenage Research Unlimited, a research firm in Lake Forest, Illinois, studying teenage trends, revealed that 9 out of 10 teenagers shopped for themselves or their families in 1988, spending $47.7 billion on groceries and household products. Traditional male/female roles are changing somewhat, as well. That same survey indicated that teenagers spend just under 1-1/2 hours a week shopping for the family; the average is about 1 hour for males and 1-3/4 hours for females (Blumenthal, 1990).

Teenagers most likely to do grocery shopping are from upper and lower income families in cities and lower income families in small towns (Blumenthal, 1990). These are the groups where the greatest percentage of mothers are in the labor force. In the Youth Monitor study, in both the two-parent "traditional" families and the two-earner families, less than 10 percent of the 6-to-11 year olds did grocery shopping, but almost 15 percent did in one-parent families.

Children (6-11 years old) often buy things with their own money. Most often it is candy (58 percent say they do) and toys (30 percent). But more than one-fifth buy soft drinks, snacks, Christmas presents, books, and magazines with their own money. More than one child in ten in this same age group uses his or her own money to buy fast food, clothes, records, tapes, and batteries (Stipp, 1988).

Children from homes with two working parents and those from single-parent households are significantly more likely to go on independent shopping trips and to buy things with their own money than are children from "traditional" households. This is most apparent in food purchases. Children from one-parent households are twice as likely to report snack and fast-food purchases than are those from "traditional" households.

Young people have acquired fairly sophisticated decisionmaking abilities by the time they reach early adolescence (Moschis and Moore, 1979). They have more income at a younger age than ever before.

The Rand Youth Poll estimate for spending by 13-19 year olds in 1987 was $53.7 million per year on themselves and $27 million on family food. Teenagers also influence how their parents spent $142 billion (Teen Spenders, 1988). The Teen Research Unlimited estimated the average teenager's income in 1989 was $60 per week (Charboneau, 1989).

The economic power of teenagers has raised concerns about premature affluence, a term used by Jerald Backman of the Institute of Social Research (1983). Teenage spending continues to be on themselves for mostly discretionary, nonessential items and is an amount young adults living independently of parents often cannot duplicate. Their consumption level and style is beyond their productive capacity in an independent adult world. The inability to replicate the lifestyle experienced as a teenager has resulted for many in a lower level of satisfaction with life as a young adult.

Also of concern is the amount of time teenagers commit to earning money and an overly materialistic orientation to adult life. One third of the male and one fourth of the female teenagers studied by Backman (1983) worked over 20 hours per week. Work is assumed to provide positive opportunities to improve and practice cognitive skills developed in school and to offer valuable training. However, many of the service-sector jobs held by teenagers have minimal training associated with them, and the skill requirements are bare minimum. The hope that jobs would allow teenagers to interact with adults in an adult fashion often does not occur. Most of the teenage jobs are located in sites where even the supervisors are in their late teens or early twenties and the other workers tend to be teenagers (Greenberger and Steinberg, 1986; Swanson, 1991).

Also of concern is what the job replaces. Teenagers with excessive workplace involvement may lack enough opportunities to experiment with other non-employment roles and to explore their identities, both important developmental tasks in adolescence. For example, having a job may preclude a teenager volunteering in the community, and, thus, the long-term affect to the community is loss of that value in a new generation of adults (Greenberger and Steinberg, 1986). In a study on teenage employment, the benefits cited were skill development, practical knowledge increase, an opportunity for financial responsibility, and a contributing factor to improved relationships. On the other hand, however, the costs of employment cited were some physical risk, lower grades, less time spent with family, and fewer extracurricular activities (Greenberger and Steinberg, 1986).

This research report has outlined some of the concerns that various clusters may want to consider as they make plans for addressing the youth and families at risk initiative. The trends have both short-term and long-term effects on individual children as they mature, on their future families, and on the future communities where they choose to live.

The issues are complicated ones in themselves. The complication is made worse by the fact that things differ by the developmental age of the children, but much of the popular press generalizes concepts across all ages of children. In addition, the parents of many of these children do not feel comfortable with their own financial practices, and, thus, they don't feel comfortable addressing these issues with their children. It is a challenging area that Extension must not ignore when addressing the needs of youth and families at risk.

References

Backman, J. G. (1983, Summer). Premature affluence: Do high school students earn too much? Economic Outlook USA, pp. 64-67.

Blumenthal, D. (1990). When teens take over the shopping cart. FDA Consumer, 24, 30-32.

Charboneau, F. J. (1989, March). Mr. green teen. American Demographics, 13-14.

Greenberger, E., & Steinberg, L. (1986). When teenagers work: The psychological and social costs of adolescent employment. NY: Basic Books.

McNeal, J. V. (1987). Children as consumers: Insights and implications. MA: Lexington Books.

Moschis, G. P., & Moore, R. L. (1979). Decision making among the young: A socialization perspective. Journal of Consumer Research, 6, 101-112.

Stipp, H. H. (1988). Children as consumers. American Demographics, 10, 27-32.

Swanson, J. A. (1991). Interest in the consuming interests of youth: Research, marketing, education, and policy perspectives. Proceedings of the American Council of Consumer Interests. Cincinnati, Ohio.

Teen Spenders (1988, June). American Demographics, p. 21.