If you have a Gen Alpha kid living in your home, chances are, you’re wondering where their financial, er, assertiveness came from. Anyone else have a 10-year-old who has been asking for cash gifts since they could toddle? Luckily, it’s not a parental misstep—it’s a generational thing. Gen Alphas are serious about money, and their spending habits prove it.
That’s demonstrated by a new study from PR firm DKC’s analytics group, shared exclusively with Fast Company, which surveyed 1,000 respondents who have children aged 8 to 13. About half were mothers (52%) and the other half were fathers (48%). The group was largely made up of millennials (72%), and median household income was between $75,000 and $99,000. Of the respondents, 70% were married and 61% were white.
The study found that Gen Alpha has some pretty significant financial impact, even though the survey respondents were not the wealthiest Americans but middle class. The typical Gen Alpha kid spends $45 of their own money each week, or about $2,340 per year. When you put all the Gen Alphas together, that comes out to about $50 billion.
Where are they getting all this money from? About 1 in 3 (36%) earn income money through online selling or reselling, and almost half (47%) do odd jobs outside the home such as babysitting to get paid. Most commonly, they’re getting paid to do chores (69%) or as a reward for good behavior, grades, etc. (73%).
Gen Alpha’s iPad kids
Matt Traub, COO of DKC and a Gen Alpha parent himself, tells Fast Company that part of the reason Gen Alphas are so financially inclined is due to the fact that spending money can be done at the touch of a finger—literally. Basically, when it comes to spending money, there’s an app for that.
“We’ve removed so many of the traditional obstacles for a 10-year-old trying to spend money, which has an impact on how you think about money and how you spend it,” Traub explains. “In-app digital payments have replaced the old, friction-filled approach of planning ahead of time, asking your parent to open their wallet, carrying that money to the store, and buying what you want.”
Likewise, apps make it easier than ever to make in-store purchases without cash. “My daughter can walk to town with her friends after school and decide on the spot to buy a strawberry refresher, with my Starbucks account that I signed into on her phone,” says Traub.
But that’s not to say that Gen Alphas spend their money carelessly. More than three quarters (76%) of parents surveyed said their children are better at making consumer decisions than they were at the same age, and 69% said they already understand the concept of corporate values.
The Gateway Generation
But parents aren’t just watching what their kids are buying. They’re actually deeply influenced by those choices. Almost half of household spending (49%) is impacted by Gen Alphas, parents say. Ninety-two percent say their children regularly introduce them to products, services, and brands. That influences the way they spend money on everything from food and movies to fashion and music.
Traub says that impact has earned Gen Alpha a new nickname: the Gateway Generation. The name reflects “the way they bring influencers and information about brands and products straight to the people who make household decisions, effectively changing lifelong consumption habits,” he says.
“This means if you catch the attention of Gen Alpha,” he adds, “you’re also tapping into the spending power of millennials, an economically powerful combination.”
There’s a lot to know about Gen Alphas and what they’re into. And it feels like you truly have to have one living in your home to keep your finger on the pulse (or, on the “buy now” button). But according to the survey, Gen Alphas’ favorite stores to shop are probably the same as their parents’: Walmart, Amazon, and Target top the list. (See the full list of favorite stores here.)
They’re also loyal to their Nike kicks: 1 in 4 parents named Nike as their Gen Alpha’s favorite brand. Other favorite brands included Apple at number 5, Lego at number 6, and Starbucks at number 8. Gen Alpha also loves luxury (they’ll have whatever the influencers are having), with 69% gravitating toward high-end brands. (See the full list of favorite brands here.)
But thankfully, it’s not all about who has the coolest shoes. Gen Alphas are thoughtful consumers, with 66% of parents saying that their Gen Alpha children implore them to give to charity. And 68% express preferences about diversity/equity/inclusion, while 63% are concerned about sustainability.
According to the research, if the kids care about it, the parents will follow. And that goes both for do-gooding and just staying in the loop: 94% of parents are paying more attention to influencers to better understand how they impact their Gen Alpha children. So if you need us, we’ll be watching TikTok, while we still can.