Kids and teens spent their time at home during the pandemic earning and saving, and these habits could last well into the future, a new report said.
- While schools were shuttered during the pandemic, kids and teens earned more from paid tasks and squirreled away their allowances, a new report shows.
- They earned a whopping $27.2 billion last year, and saved $2.8 billion of that, the report said.
- At the same time, changes to family finances caused almost three-quarters of kids to worry about money during the pandemic.
The report, released Wednesday by gohenry, a fintech company that offers a debit card and financial app aimed at kids, shows how the pandemic has shaped kids’ finances and attitudes toward money. Gohenry found that kids between the ages of 6 and 18 racked up earnings and mirrored adults in building up savings. They also worried more about money than before the pandemic.
Kids collectively earned $27.2 billion in 2020, mostly from regular allowance payments ($25.5 billion) and an increase in paid tasks ($720.3 million), said the report, which analyzed the behavior of more than 57,000 of gohenry’s active U.S. users. The results were statistically adjusted by the Centre for Economics and Business Research, an independent consultant, to be nationally representative. Kids saved $2.8 billion, or about 10% of their total income.
Last year when the pandemic struck, governments closed schools and most businesses and told people to stay home to try to slow the spread of coronavirus. The economic impact on adults, including massive layoffs, plunging income, and work from home, affected children as well.
“The COVID-19 pandemic has had a seismic effect on the lives of American kids and teenagers,” Dean Brauer, co-founder and U.S. president of gohenry, said in the report.
“Although it’s alarming to discover that changes to family finances have caused almost three-fourths of young people to admit that money worries have affected their wellbeing, it’s encouraging to see they have already taken steps to improve their money management—and early indications suggest that these changes will continue post-COVID,” wrote Brauer.
Like adults, kids began saving more when the pandemic began. During the second quarter of last year, American kids saved 234% more than they did in the first three months. Among 16-year-olds, that rate surged to 916% more. Among adults, the U.S. personal savings rate reached a record 33.8% in April 2020, up from 13.1% in March.
“While it’s true that a lack of opportunity to spend money has likely contributed to this increase in savings (the amount they saved dropped by 63% in July, August and September, when many states began opening back up), gohenry savings goals indicate that kids are actively putting money away for a brighter future, whether that’s summer, Christmas or a shopping trip,” the report said.
Have a question, comment, or story to share? You can reach Medora at firstname.lastname@example.org