Some wealthy parents are concerned their children suffer from 'affluenza' Savings funds, allowances can teach value of money

November 24, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- For many Americans, child care worries start with day care and end with paying for a college education. For the richest among us, they can include whether to set up a brokerage account for the youngsters.

According to a poll by U.S. Trust Co., the wealthiest parents in the United States worry that their offspring suffer from what it calls "affluenza."

That's what children of wealthy parents have when they have such a luxurious, pressure-free upbringing that it distorts their values and robs them of initiative.

The survey polled Americans whose wealth placed them in the top 1 percent and found that two-thirds worry that their children "will place too much emphasis on material possessions" and "will be naive about the value of money and how hard it is to earn."

To fix that, 89 percent of parents polled said they set up savings accounts for their children and gave them allowances. Two-thirds polled said they helped them set up budgets for their personal expenses.

About half of the parents arranged checking and brokerage accounts for them.

"Affluent parents keep a pretty tight rein on their children financially," said Jeffrey Maurer, president and chief operating officer of U.S. Trust. "They do not entrust them with large amounts of money, and they expect them to pitch in and help at an early age."

That translates to "appropriate" weekly allowances of $7 for an 8-year-old, $9 for a 12-year-old, $17 for a 16-year-old and $41 for a college student, the survey said.

Some of the respondents said a child should no longer receive an allowance past the age of 19.

Others said a child in graduate school should have an allowance of $36 a week.

Pub Date: 11/24/96

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