Gen Alpha, the cohort of young people born from 2010 onwards, is emerging as a generation of family ‘finfluencers’. The latest Youth Economy Report from prepaid debit card and financial education app GoHenry reveals the youngest generation’s combined £3.3 billion spending power influences everything from where families spend, to the brands they buy, and even how much they save.

The exclusive insights into Gen Alpha’s money habits - gathered from over 310,000 6-14-year-olds and over 2,000 Gen Alpha parents in the UK - show that the youngest generation holds the household purse strings, with Gen Alpha parents estimating that, on average, over a quarter (26%) of household spending is influenced by their child’s opinions. A further two-thirds (67%) of parents say they’ve discovered new brands or products from their Gen Alpha kids, with 69% going on to buy them.

Gen Alpha aren’t just influencing, they’re earning and saving more than ever before too. In the last year, GoHenry Gen Alpha kids and teens earned £193M (an increase of 52% from the previous year) and stashed away £20.5M in savings (an overall 36% increase compared to the previous year).

Gen Alpha’s money skills rub off on parents

With nearly 1 in 10 kids (9%) already saving for a house, the youngest generation’s forward-looking approach to money is encouraging parents to think more carefully about how much they’re saving too. A quarter (25%) of Gen Alpha parents say their child has influenced them to save more, and over 1 in 5 (21%) say their child has influenced them to shop around and be more frugal.

In terms of what’s driving Gen Alpha’s savings savviness, the most popular pocket money-saving motivators for this age group are:

1. To buy new items (e.g. clothes, shoes, beauty products, tech) - 43%
2. To go out with friends - 32%
3. To build a rainy day fund - 20%
4. To not have to rely on parents - 20%
5. To travel when they’re older - 17%

Eva, a six-year-old from Wiltshire, has been teaching her Mum new ways to save: "My mummy and I are learning to save together, and it's fun helping her find new ways to do it. I noticed that bottles of flavoured sparkling water are really expensive, so I told her we should buy cordial and mix it with plain sparkling water instead. It's much cheaper!”

Social media driving kids’ spending habits

The first generation entirely born in the 21st century, Gen Alpha has been hugely influenced by the growth of social media. This influence is reflected in where kids are spending their money, with over a third (39%)[12] of Gen Alpha admitting that social media impacts their brand preferences, and 28%[13] saying it influences what they buy.

According to GoHenry data, in the past year, Gen Alpha kids spent over £3 million[14]on food delivery services (an increase of 113% year-on-year), and girls spent £4 million[15] on health and beauty (a rise of 201%) as popular online beauty trends dominate social media feeds.

The financial finesse of Gen Alpha

Having grown up watching bedroom businesses boom on social media, over a third (38%)[16] of Gen Alpha have already started or plan to start a side hustle, with 29%[17]motivated to do so to save for the future - demonstrating a desire for financial independence from a young age.

This ambition is having a positive influence on family funds too, with almost 1 in 5 (19%)[18] Gen Alpha kids who have started or plan to start a side hustle doing so to help their parents out with household bills.

Louise Hill, Co-Founder and CEO of GoHenry said: “Gen Alpha is quickly becoming the most influential financial force in their households. Influencing their parents on how to budget more effectively and spend more responsibly, these kids are changing the face of family finances. 

“Their spending power of £3.3 billion, paired with their entrepreneurial mindset and savviness for savings, means they could be the most economically powerful generation yet. Ensuring they receive a solid financial education will be vital to unlocking Gen Alpha’s potential and setting them - and their families - up for a more robust financial future.”