The data: Gen Alpha children—born between 2010 and 2025—have different money habits depending on whether their parents are millennials or Gen Xers, according to a recent USAA study.

Digging into the data: Kids with Gen X parents had savings balances about 30% higher than those with millennial parents. While parent age tends to correlate with a child’s age, it may also shape financial habits like app use: Kids with millennial parents had twice the peer-to-peer (P2P) payment volume of those with Gen X parents.

Spending and saving patterns shift with age. Younger kids often accumulate funds via allowances but don’t spend much. As they grow and become more independent, their account values increase through jobs and more parental borrowing, but so does their spending.

Differences in kids’ financial behavior also reflect their parents’ digital upbringing. Gen Xers came of age in the 1990s, as the internet took off, while millennials did so at the dawn of the smartphone era. The habits formed at these moments inform how children interact with devices and the apps that they favor—including when it comes to financial activities.

Implications for banks: Kids’ varying money habits underscore the limits of the industry’s current one-size-fits-all “kids/youth banking” products. Chase, Capital One, USAA, and Bank of America market products for consumers under the age of 18. But the goal should be banking apps that confer early "ownership" over saving and spending—and evolve with kids’ needs as they age.