Affluent consumers teaching children about money

Affluent parents are teaching their children to value philanthropy, cultural experiences, and other personally enriching activities above material goods according to the Third Annual American Express Platinum Luxury Survey.

Ninety-one percent of responding parents indicated that they encourage their children to participate in charitable or philanthropic activities and almost two-thirds (62%) of children have donated a part of their own money to charity.

When affluent parents spend
Almost all the parents (94%) said that they want their children to have experiences that assure they are cultured and well-rounded, and even more (96%) spend time talking to their children about good ethics and values. As such, when affluent parents do spend significantly on their children, the survey found it is usually on cultural activities such as international travel, with two-thirds (68%) of respondents' children having travelled internationally.

Even when shopping with or for their children, affluent parents emphasize the experience more than the purchases, as 66% reported that the experience of shopping with their children is more important than what they buy.

According to Simon Kahn, vice president of Platinum Card Product Management for American Express, "Affluent parents are raising their children to be value-conscious consumers with an appreciation for life-enriching experiences."

Responsible children
Parents said they emphasize the value of money through discussions with their children, and affluent children are frequently taking part-time jobs when they reach the age of 15. Parents also stress the importance of philanthropy with their children and lead by example, giving both money and time to charity. Specifically, the survey found that:

• 81% of respondents indicated that they believe their children appreciate what they have.
   
• 76% of affluent parents believe their children understand the value of money.
   
• A little more than half (53%) of all children aged 6-17 receive a regular allowance. The average weekly allowance for children aged 6-14 is US$7, and US$21 for children aged 15-17.
   
• 45% of children in the 15-17 year age range have part-time jobs. For children aged 18-21, the figure increases to 73%.
   
• 91% of parents encourage their children to participate in charitable activities, and two-thirds (67%) of all respondent's children actually do so - or at least donate part of their own money to charity (62%).
   
• 19% of adults identified volunteer events and charity functions as a personal passion. Of those that did, 80% indicated that they include their children in such activities.

Spending on noble causes
The survey also found that, when affluent parents spend on their children, they tend not to accentuate the acquisition of material goods but rather the accumulation of experiences. Parents often share experiences with their children, such as fitness, dining, or the theatre. Children of affluent parents are increasingly well-travelled, often travelling internationally at a much younger age than their parents did. Among the survey's findings on parents' focus on experiences:

• The top three personal passions among parents were identified as physical fitness (45%), dining out (39%) and travel (39%).
   
• Parents are sharing their passion for physical fitness with their children, with over half (53%) of respondents' children receiving personal lessons for sports.
   
• Of those affluent parents (39%) who identified travel as a personal passion, 92% indicated that they include their children in their travel activities.
   
• Affluent parents surveyed said when it comes to personal passions they spend the most money on travel, with an average overall annual spend of US$13,004. Of the 22% of respondents with a reported household income above US$600,000, average overall annual spend on travel increased to more than US$20,000.
   
• More than two-thirds (68%) of children were reported to have travelled internationally before the age of 17, with 80% of boys aged 13-14 and 77% of girls in the same range having already done so.
   
• Parents reported their first international trip at an average age of 19.
   
• When it comes to dining out, parents said they spend an average of US$5,786 annually. 84% of those parents that identified dining out as a passion reported that they include their children in this activity.
   
• 41% of parents reported that their child aged 17 or under is taking music lessons, and 55% of children are attending theatre and music performances.
   
• 94% of parents said they believe their children have experiences that make them more cultured and well-rounded.
   
• Two-thirds (66%) of parents indicated that they would give up 20% of their salary to spend 20% more time with their children.

Spending on basics
Parents reported that they do not spend extravagantly on the basics of life, such as haircuts, jeans and shoes. However, they did indicate that they spend more extravagantly on certain items and gifts for special occasions. For example:

1. 60% of parents reported that their children keep up with the latest fashion trends. Yet, on average, parents spend US$53.50 on sneakers (trainers), which is above the US national average of US$33.74, but well below the US$100+ price tag of many popular brand-names today.
    
2. On average, parents spend US$42.50 on jeans for children aged 6-17, which is above the national average of US$17.82, but below the higher prices of popular designer labels.
    
3. Parents reported spending an average of US$59 a month on athletic equipment for their teens, and an average of US$40 per month for personal electronics.
    
4. For holidays and birthdays, however, parents reported spending at a higher level for their children. The average combined holiday and birthday expenditures for children aged 6-14 was US$738, US$977 for children aged 15-17, and US$992 for those aged 18-21.
    
5. One-third (33%) of children aged 15-17 are reported to own their own cars, with an average value of US$15,682. Of these teens with cars, roughly two-thirds (65%) had their cars paid for by their parents, and 17% received their parent's car when the parent bought a new one.

The survey
The American Affluence Research Center conducted the survey for American Express. To qualify, respondents had to report an annual household income of at least US$150,000 and be 30-59 years old. Respondents were not required to be American Express cardmembers to participate. The survey included 1,170 respondents, with an average annual household income of US$472,000. 96% of respondents were married. The average respondent was aged 47, and came from a household with 2 children.