Report Reveals U.S. Kids Contributed $24.3B to the Economy During COVID-19
gohenry unveils new data detailing how COVID-19 transformed the way kids and teenagers earn, save, spend, and give money
NEW YORK, April 27, 2021 /PRNewswire-PRWeb/ -- gohenry, the kids' debit card and financial education app, today released its annual U.S. Youth Economy Report, revealing how the past year has transformed the money habits of Gen Z and Gen Alpha. According to the report, American kids and teenagers earned an impressive $27.2 billion in 2020 and contributed $24.3 billion to the economy.
gohenry's Youth Economy Report looked into the real-life earning, saving, spending, and giving habits of 57,000 US children aged 6-18-years-old to show how the pandemic has transformed Gen A's and Gen Z's attitudes to money.* This data was upweighted to be nationally representative and revealed how new realities like stay-at-home orders, virtual learning and social distancing drastically changed kids' daily money habits. gohenry found that while the greater U.S. economy experienced a significant shock during the past year, the youth economy was bolstered by income from paid chores and tasks completed when schools were closed.
Highlights from gohenry's U.S. Youth Economy Report include:
Kids and teens played a key role in the economy in 2020, contributing $24.3 billion between January and December 2020.
- Kids earned more from chores and allowance during COVID-19 than ever before. Unlike many adults, kids saw their earnings rise in 2020, partly due to a 28% increase in lucrative paid tasks in Q2, such as mowing the lawn ($9.26). babysitting ($8.57), gardening ($5.32), and washing the car ($4.57).
- American kids collectively earned $27.2 billion in 2020, with the bulk of these earnings coming from regular allowance payments. The average amount received is $9.15 per week, although this varies considerably, according to age and location.
- Relatives and friends chipped in through socially distant giving: Digital financial gifts to kids' gohenry debit cards rose 51% via Giftlinks (this feature in the gohenry app allows friends and family to easily send money directly to a child's gohenry account for special occasions, like a little extra allowance from Grandma or for a birthday present).
The way kids and teens spend their money is changing.
- Kids' spending has moved online. In 2020, more than half (52%) of kids' and teens' spending took place online, compared to 30% in 2019. This change is driven by an 80% increase in gaming spend during Q2, when the U.S. declared a state of national emergency and the first lockdown took place.
- Top spending categories in 2020 include: Gaming ($6.4 billion); Restaurants & Takeout ($1.5 billion); Fashion ($1.1 billion); Food Delivery ($640.2 million); Health and Beauty ($405.5 million); and Toys & Hobbies ($78.8 million).
- 2020 brought an increased focus on charitable giving. The research showed a 19% increase in the average amount donated to charity by gohenry children as young people recognized an opportunity to use their money to help others.
A shift to a cashless economy.
- 39% of American kids aged 6-18** are more concerned about using cash since the start of the pandemic and, in 2020, ATM withdrawals accounted for only 6% of their total spending.
Both savings and financial concerns increased during the pandemic, as kids and teens became more financially aware.
- Kids saved $2.8 billion in 2020, or about 10% of their total income. American kids saved 234% more during Q2-2020 than they did in Q1-2020, rising to 916% more among 16-year-olds. Data from gohenry's savings goals feature indicates that kids actively put money away for a brighter future, whether that's summer entertainment, holidays, or a shopping trip.
- Kids expressed more concern about money since the onset of COVID-19. In a separate survey**, gohenry found 51% of 6-18-year-olds worry about money, with 73% of those sharing that they worry more since the start of the pandemic, perhaps due to an increased awareness of how they, and their family, earn and spend money.
"COVID-19 changed our lives in so many ways, and was the major reason we downloaded gohenry," said Martha Kirkaldy of Queens, New York. "I contracted COVID early on in the pandemic and as a result, I used gohenry to send my son Ashton money while I was in quarantine. gohenry has empowered us to have conversations about earning and saving. We took a difficult situation and turned it into a teaching moment, and now Ashton has learned the importance of saving."
"The COVID-19 pandemic has had a seismic effect on the lives of American kids and teenagers," said Dean Brauer, co-founder and president of gohenry. "Although it's alarming to discover that three-fourths of young people admit that money worries have affected their mental wellbeing, it's encouraging to see they have already taken positive steps to improve their money management through seizing opportunities to increase their earning power, stash away savings, and, perhaps the most gratifying, increase their charitable giving."
"We've long known that Generation Alpha and Generation Z are committed to driving social change, but the impressive increase in donations from young people – during a pandemic that has had a huge impact on their personal lives – indicates that they're ready to create change, and be good with money, using their own money to help others less fortunate than them."
To view the full report, please visit gohenry's website here.
Methodology
*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.
About gohenry
Launched in 2012, gohenry is a U.S. and UK based fintech/edtech company with a mission to make every kid good with money and revolutionize financial education. It's award winning, innovative product helps parents teach their kids healthy spending habits and financial literacy skills that they can go out and apply in the real world. The gohenry debit card and app is designed specifically for 6-18 year-olds. In an increasingly cashless society, gohenry's innovative debit card and app gives young people the independence to learn and take charge of their own spending and saving in a safe environment, while the app's parent version allows parents to guide kids through the early stages of digital finance and get organized around allowance. gohenry is building a global movement of over 1.5 million customers who fiercely believe that being good with money is a vital life skill. For more information, visit gohenry.com or follow us on Twitter, Facebook and Instagram.
In the U.S. the gohenry card is issued by Community Federal Saving Bank, member FDIC, pursuant to license by Mastercard International.
Media Contact
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SOURCE gohenry
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