27 Apr 2021
When the COVID-19 pandemic hit in March 2020, kids’ and teenagers’ lives were turned upside down. With schools closed, state and college entrance exams canceled, and social contact with friends and extended family strictly limited, kids had to adapt – and fast.
The gohenry Youth Economy Report paints a clear picture of young people’s changing habits as we navigated a year of lockdowns, stay at home and shelter in place orders, remote learning, social distancing, and quarantine. And it reveals that kids and teenagers are now redefining exactly what it means to be good with money.
Our Youth Economy Report gives a unique insight into the financial habits of 57,000 American children ages 6-18, who used their gohenry debit card throughout 2020. We’ve analyzed gohenry data, which has been scaled up to be nationally representative, to find out how much our members earned, saved, spent and donated. We’ve combined this with a survey conducted by Censuswide (1), based on a sample of over 2,000 American children, to gain extra insight into children and teenagers’ changing lifestyles and shifting priorities.
Remarkably, at a time when the U.S. economy experienced a significant shock, we’ve found that the youth economy remained buoyant throughout 2020, and the amount kids earned, saved and gave to charity increased.
Dean Brauer, co-founder and U.S president of gohenry says: “Our data also shows that, between January and December 2020, American kids contributed $24.3 billion to the U.S. economy*. They also prioritized saving, which suggests that the lasting legacy of COVID-19 could be a more considered attitude to money management, with Generation Alpha (born since 2010) and Generation Z (born between 1999 and 2009) leading the way.”
Over the course of 2020, American kids and teenagers collectively earned $27.2 billion*, which was made up of regular allowance payments, paid tasks and gifts – some of which were sent directly to their gohenry account via Giftlinks.
Although the average weekly allowance payment is $9.15*, this varies according to age and location. Kids also collectively earned an additional $720.3 million* from paid tasks. These earnings increased by 28%* during the second quarter of 2020, largely thanks to lucrative tasks like washing the car (earnings for this increased by 144%) and exercising (earnings increased by 117%). Boys earned more for washing cars (earnings increased by 144% in Q2), and girls earned more for babysitting (earnings increased by 142%)*.
Socially distant gifting also gave kids’ earnings a boost. With many extended families unable to meet face-to-face, some gohenry kids celebrated Christmas, Thanksgiving, birthdays and other celebrations, including Easter, Eid al-Fitr, Halloween and Diwali, with a little help from Giftlinks. During Q2, over 4,800 gifts from gohenry Giftlinks were gratefully received, with an average value of $45.
Unfortunately, the pandemic has made children acutely aware of money, with 73%** of those we surveyed saying that they worry more about money since the start of the pandemic, and admit it has affected their wellbeing (2).
This could explain why American kids saved $2.8 billion* in 2020, which equates to about 10% of their total income – three percentage points higher than the average monthly amount saved by adults (3).
Although it’s alarming to discover that changes to their family finances have left so many young people feeling anxious, it’s encouraging to see that they have already taken steps to improve their money management skills, which bodes well for their financial future.
Predictably, COVID-19 restrictions further encouraged young people’s shift to online spending: over the year, 52% of their spending took place online, rising to 63% in April, May and June*. When they do shop in-store, almost half (48%) of the children and teenagers we surveyed told us that they’ve been more concerned about using cash since the start of the pandemic (4)**.
With schools, stores, and entertainment venues closed for weeks or months at a time, most kids turned to screens for entertainment. So it’s no surprise that the bulk of their spending was directed at gaming and technology, particularly for boys: in 2020, American boys spent over $5.7 billion* on gaming.
In Q2, kids also spent 61%* more per month on technology, 62%* more at the App Store, and 83%* more at marketplace stores (such as Amazon, eBay, and Etsy), which continued to sell a wide range of products, many of which were hard to find elsewhere.
After a year of uncertainty, it’s heartening to learn that gohenry kids donated an impressive $8,192 to our charity partner, Boys & Girls Clubs of America BGCA), during 2020. What’s even more impressive is that this is made up of microdonations of, on average, $0.09 per week. Over the year, kids who donated via their gohenry app, each gave an average total of $4.91 – a 19% increase on the average donation in 2019.
“Both of my kids give to BGCA and have done since I opened their accounts. They understand the importance of charity and giving back, and feel like it’s the least they can do for others.”
Margaret M, Chicago, IL
The pandemic has had a huge impact on children and teenagers, and our data reveals the different ways that restrictions shaped their behavior in 2020.
From their increased motivation to complete paid tasks, to their focus on savings and their commitment to save for the big-ticket items that will help them navigate COVID-19 restrictions – like a laptop or PC, a phone, AirPods, a bike or a car – we can see that they are already planning for a brighter future.
But the most encouraging change is the huge increase in charitable giving. We’ve long known that Generation Alpha and Generation Z are committed to driving social change, but this impressive increase in donations indicates that they’re ready to rewrite the concept of what it means to be good with money – especially when it comes to helping others.
*gohenry insights are based on the behavior of over 57,000 U.S. child users who were ‘active’ across all of 2020 (child users who activated their gohenry accounts before the start of 2020 and did not cancel at any point during the year), and scaled up by the Centre for Economics and Business Research (Cebr) to be nationally representative. The Cebr is an independent consultancy providing analysis, forecasts and strategic advice to major multinational companies and financial institutions.
**This research was conducted by Censuswide, an international market research consultancy,based on a sample of 2,006 children aged 6-18 in the USA, and a minimum of: 33% aged 6-10, 33% aged 11-15 and 34% aged 16-18. The fieldwork took place between 10/8/20 – 10/16/20. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
1. The research was conducted by Censuswide, based on a sample of 2,006 children aged 6-18 in the U.S.
2. This research was conducted by Censuswide, based on a sample of 2,006 children aged 6-18 in the U.S.
4. This research was conducted by Censuswide, based on a sample of 2,006 children aged 6-18 in the U.S.