Kids are learning that when the economy gets tough, the tough will cut back on their spending, according to a recent poll from the Northwestern Mutual Life Insurance Co.
Kids are learning that when the economy gets tough, the tough will cut back on their spending, according to a recent poll from the Northwestern Mutual Life Insurance Co.
The Milwaukee-based insurer polled 606 children up to 17 years of age online from April 1 to July 3 asking them to name the first action they would take if money got tight. Sixty-five percent of respondents said that they would trim their expenses, with 26% saying that they would “spend a little less” and 39% saying that they would “stop spending” —buying only what they needed.
Many of the kids also said that they would either get a job or work more hours to help bolster their finances. Twenty-nine percent of those surveyed said that if money were tight, they would “earn more” either by getting another job or working more hours.
That idea wasn't as popular among the adults polled in the same survey.
Among 245 respondents 18 to 29, just 15% said that they would earn more to manage a waning cash flow, while just 3% of 299 respondents 30 to 45 were willing to add to their workload to raise money. Eighty-one percent of the 18- to 29-year-olds said that they would either reduce or halt spending, as did 93% of the adults between 30 and 45.
The newfound frugality is taking place amid rising personal savings rates. As of May, Americans were saving 6.9% of their disposable personal income, up from 5.6% in April.
As recently as April 2008, the savings rate was at 0%, according to data from the Department of Commerce's Bureau of Economic Analysis.
“Children are learning quickly that when debt becomes a problem, saving is part of the solution,” Meridee Maynard, senior vice president of Northwestern Mutual, said in a statement. “This youngest generation of Americans appears willing to save more and do more to protect what matters to them.”
