The Unexpected Financial Ambitions Gen Alpha Children Are Already Budgeting For

A recent survey reveals that children as young as 6 years old are setting aside money with future financial goals in mind.

Planning for retirement poses a financial challenge for individuals of all ages, with many Americans facing the prospect of insufficient funds for their post-career years1. However, Generation Alpha appears determined to tackle this issue early on.

Surprisingly, children aged 6 to 14 are already contemplating retirement and have commenced saving for this long-term goal.

Investigating Gen Alpha’s financial awareness, Acorns, a financial technology company, uncovered various eye-opening insights in its first-ever “Acorns Money Matters Report for Kids.”

Financial Focus in Kids Today

Children today are displaying forward-thinking behavior by saving for future milestones such as college, their first car, and even their first home purchase. What motivates this financial awareness at a young age, and how can The Positive Parent support and maintain this proactive approach? Let’s delve into these questions.

Understanding Gen Alpha’s Saving Practices 

The study conducted by Acorns delved into the financial habits of the youngest generation by surveying 2,000 individuals aged 6 to 14 along with their positive parents.

Gen Alpha is proving to be a significant economic force, showing early signs of preparing for future financial goals. While the survey allowed for multiple answers, 41% of unique responses indicated various substantial expenses that they are actively saving for.

“Some children mentioned saving for retirement when asked about their savings goals,” noted Acorns CEO Noah Kerner in a conversation with Parents. “This generation displays a remarkable level of financial awareness, as evidenced by the rapid growth of our Acorns Early platform designed for kids and teens. The fact that retirement planning is already part of their thought process is truly intriguing.”

Financial Security Motivates Saving Activity

All saving activity among Gen Alpha parents is driven by a desire for financial security, as reported. The data illustrates that while 95% of these parents feel responsible for saving for their children’s future, a third of them have not yet initiated saving efforts (36%).

Concerns About Financial Independence

For a notable 30% of Gen Alpha parents, the pressing issue lies in wanting to save to avoid relying on parents for financial assistance.

Where is Gen Alpha getting money from?

Gen Alpha’s financial acumen extends beyond just saving money; they also prioritize earning it.

The primary source of income for Gen Alpha children is an allowance from The Positive Parent. Research indicates they earn approximately $27 per month for completing chores, with some able to earn an additional $23 for non-chore-related activities.

Additionally, the Acorns study revealed that 21% of Gen Alpha members are already engaged in a side hustle or business, with 48% expressing interest in launching a business or side venture in the future.2

Money Discussions at Home Influence Gen Alpha’s Behavior

Previously, parents used to have secretive money conversations away from children, but this practice is changing in some households.

The Acorns report reveals that a considerable number of Gen Alpha kids are exposed to money talks by their parents, potentially fueling their financial ambitions. When questioned about how frequently their parents discuss money in their presence, three out of five older Gen Alphas (aged 10-14) mentioned that their parents talk about money often, with a third stating that these conversations happen very frequently.

Moreover, the financial stress experienced by parents is instilling in Gen Alpha a drive to earn money and support their families. According to the survey, one in ten respondents aged 6 to 14 expressed that helping their parents or the effects of the cost-of-living crisis on expenses (11%) serve as key motivators for their saving practices.

Gen Alpha Kids Are More Financially Savvy

Still, other Gen Alpha members whose Positive Parents openly discuss money stress are increasingly focused on creating their own emergency funds at a young age: About 27% of Gen Alpha survey respondents who associate stress with money are more inclined to create an emergency fund.

The Changing Landscape of Financial Education

“Our Kids Money Matters Report tells me that foresight and clarity about money is way different for Gen Alpha than older generations,” Kerner said. “And I think that’s because money is such a topic of conversation now in a way that it just hasn’t been before.”

Transparency in Financial Conversations

Monique White, the head of community for the credit-building platform Self Financial agrees, suggesting that conversations about salaries, credit scores, and debt are a lot more transparent nowadays.

Increasing Openness Among Parents

“Many Positive Parents are more open when it comes to talking about money—much more than past generations,” says White. “As a kid, I didn’t have a lot of conversations about money or financial education. The only thing I knew about was spending money, and paying bills on time.”

Role of Social Media in Financial Education

Openness about the topic at home may not be the only reason Gen Alpha is so tuned into personal finance. About 28% of the Gen Alpha kids surveyed say social media has become a significant source of financial education for them.

I’ve noticed a significant change in how younger generations, especially Gen Alpha, are approaching personal finance.

“There is a fascinating shift among younger generations, particularly Gen Alpha, in their engagement with personal finance,” noted Ebony Beckford, CEO and founder of the educational resource Fin Lit Kids.

Factors Driving Increased Financial Awareness Among Younger Generations

“This growing awareness is driven by several factors. Digital platforms like TikTok and YouTube have made financial education accessible and relatable, breaking down concepts like saving, budgeting, and investing into bite-sized, engaging formats. Schools, nonprofits, and businesses are increasingly recognizing the importance of financial literacy and implementing initiatives to empower kids to take control of their financial futures,” Beckford explains.

Tips To Foster Continued Learning With Children

Children are showing signs of increased financial literacy at a young age. The Positive Parent can play a crucial role in nurturing this behavior and supporting their ongoing educational development.

Discussing the Significance of Monitoring Expenses

If your child receives an allowance, gift cards, or cash for special occasions, guiding them in tracking their income, expenditures, and where they spend money can enhance their financial literacy, as suggested by Stacey Black, the principal financial educator and certified financial education instructor (CFEI) at BECU, a non-profit credit union.

“This activity can be adapted to suit various ages and learning preferences, whether through a simple worksheet, ledger, or digital budgeting applications,” Black explains. “It also opens up discussions on decisions and potential trade-offs they might encounter along the way.”

Avoid Rejecting Without Explanation

As a Positive Parent, it’s important not to simply say ‘no’ to a child’s request without providing an explanation. This can be a missed opportunity for valuable learning.

According to Beckford, constantly rejecting children’s requests can inadvertently instill a poverty mindset. Instead, when your child asks for something, use it as a chance to initiate a conversation about money. Encourage your child to come up with creative ways to earn money for the desired item and collaborate on creating a budget or savings plan.

Having these discussions with kids helps empower them to make informed financial decisions and cultivates independence and resourcefulness.

Instill the Practice of Saving Early

Many children from Generation Alpha understand the significance of saving money, but not all of them do. If your child has not grasped this concept yet, it is essential to have a conversation about it.

According to financial literacy expert and author David Delisle, it is crucial to motivate children to save a portion of all their earnings, whether it is their allowance, gift money, or their first paycheck. Setting aside 10 to 20% of their income can help them develop a habit of valuing financial independence. Engage them in conversations about their goals and prompt them to think about how their savings can contribute to achieving their future aspirations.

Embrace digital resources

It’s well known that children enjoy using electronic devices. Nowadays, there is a wide range of digital tools accessible that can transform financial education into an enjoyable and informative experience.

“Numerous digital tools are available to assist in monitoring expenses, keeping an eye on balances, and setting alerts for significant purchases. Additionally, various applications can simplify the understanding of complex financial concepts in an entertaining manner,” says Black.

Acorns is introducing a new smart money app and debit card known as Acorns Early. This platform is designed to educate children and teenagers about the importance of money. Younger children can begin by inputting their chores and allowances and engaging in educational courses. As they grow older, the program can assist them in monitoring expenses, creating budgets, and saving money.

The Positive Parent via Acorns

Remember to discuss credit—and make it relatable

Often, when talking about managing family finances, subjects like budgeting and saving take center stage, while the topic of credit is often overlooked, according to White.

“However, your credit score plays a significant role in important financial milestones, such as securing your first apartment or buying a car,” White points out. “Credit holds particular importance for those transitioning into adulthood—especially individuals who may require student loans… or are contemplating obtaining a credit card at age 18.”

Model positive financial behaviors

Kids often learn by example, so demonstrating how you save, budget, and make thoughtful spending choices can significantly influence them. “Share how you research deals or prioritize saving for family goals,” recommends Jennifer Seitz, director of education at the financial technology company Greenlight. By witnessing you make wise financial decisions, children are more likely to adopt similar habits as they mature.