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.
