August 17th, 2010 – According to a new survey by PASS from American Express SM, approximately one in three parents (36%) say that talking to their teens about an allowance is comparable or more difficult than the stressful experience of negotiating the purchase of a car.
Over half of parents (55%) give their teens an allowance. Parents give teens an average of $66 per month.
Teens also indicated that talking with their parents about money is not easy, as nearly half of teens (49%) say that having to ask their parents for money is a “hassle.” Both parents and teens do agree they want safety; more than half of teens (56%) and parents (54%) are concerned about safety and losing money when teens carry cash. With these concerns, many parents are looking for additional financial resources for their teens, including online tools to manage their teen’s money and spending (48%).
The survey was conducted in conjunction with the general public launch of PASS from American Express, that until now, has only been available to American Express Cardmembers. PASS, a prepaid reloadable card parents give to teens and young adults, provides transparency and convenience for parents looking to provide a safe currency to teens, while also offering teens early lessons of financial independence and real-world experience at responsible spending. As a result, PASS provides peace of mind to parents as a safe, smart alternative to cash, credit and debit cards.
PASS Survey Results: Allowances Play Important Role in Teen Money Management
The recent survey suggests that teens and young adults primarily receive money through allowances, gifts, or unscheduled jobs such as chores around the house. Over half of parents (55%) give their teens an allowance. Parents give teens an average of $66 per month, including funds for a regular allowance, clothing or food, extra spending money, and/or payment for jobs around the house.
Parents are more likely than kids to say that allowance is tied to some requirement, such as completing chores (85% parents, 78% teens), maintaining good grades (66% parents, 60% teens) or behavior (63% parents, 49% teens), which may suggest how parents and teens are not seeing eye to eye and why parents find negotiating an allowance difficult. Teens are more likely to believe that they are given a regular allowance regardless of fulfilling any responsibilities (9% teens, 3% parents). That said, both agree that financial assistance is not expected from the parents if a need arises for additional funds before their allowance is due (parents 41%, teens 42%, rarely/never).
Additional Resources Help Parents with “The Money Talk”
American Express and personal finance expert Jean Chatzky have partnered to launch “The National Money Night Talk,” a program culminating on September 16, which encourages families around the country to talk with their children about money and financial responsibility. According to a separate survey by American Express and Jean Chatzky, six in ten parents (62%) indicated they are looking for ways to teach their kids about the importance of money management before they overspend. To help parents get prepared to have “the talk,” American Express and Chatzky have created an online resource available at www.moneynighttalk.com. On the site, parents can sign a pledge that they will talk to their kids about money and access exclusive Jean Chatzky videos and resources endorsed by the Council for Economic Education, based on the organization’s national content standards. The free online resource is available in three different tracks based on age: middle school, high school and college.
PASS Provides the Account Controls Parents Requested
Online management tools provide controls and full transparency for how the Card is being used.
Parents can:
Teens and young adults can also manage their account online, view real-time transaction history and set up text alerts to receive balance and transaction information.
Benefits and Cost
The membership fee entitles PASS Cardmembers to valuable protections and benefits including:
“The response from our Cardmember preview has been overwhelmingly positive,” said Alpesh Chokshi, president of American Express’ Global Prepaid business. “We designed PASS with parents in mind, and our research with parents of PASS Cardmembers revealed that most parents registered for PASS because it’s an easy and convenient way to give money to their teen while also serving as a tool to help teens learn financial responsibility. Many parents also told us that the safety features of PASS alleviated concerns about teens carrying large amounts of cash, and the automated reloads made the allowance process much easier.”
A parent must register for PASS online at www.americanexpress.com/pass. Funds can be loaded through an American Express ® Credit or Charge Card, savings or checking account. PASS, shipped and sold only in the United States, can be used virtually anywhere that accepts American Express Cards.
Access to tips and tools about budgeting and responsible money management is available on the PASS site. Teens can also get financially certified via an assessment through Junior Achievement, the world’s largest non-profit organization dedicated to empowering young people to own their economic success.
About the Survey
This research survey was conducted by Echo Research and commissioned by American Express. The survey was conducted online among a random sample of parents of children age 13 to 17 and children age 13 to 17. A total of 401 interviews were completed among parents and 400 among Children. Interviewing was conducted between July 8 and 15, 2010. The poll has a margin of error of +/-4.9% within each sample group.
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Many more interesting quotes in the video below:
