In the April iBi, I wrote about fostering financial wisdom in children based on their level of development. A big piece of this puzzle—more so now than ever—is the influence of technology. It has become increasingly important not only to monitor what our kids are viewing or playing, but also to help them navigate the constant barrage of advertisements in order to become a financially wise adult. When it comes to electronic buying, it’s more than just “Add to the Cart.”
Money Monsters and Marketing
Author Joline Godfrey, in her book Raising Financially Fit Kids, uses the term “money monsters” to describe the threats that challenge your authority as a financial mentor. Among these threats are the media and marketing. In reality, the whole purpose behind advertising is to convince potential buyers of what they want—and then persuade them to treat themselves with it.
In The Kids Market: Myths and Realities, Dr. James McNeal discusses when he first began exploring the idea of children as a market. It was 1962, and the idea was not well received by marketers, as kids were not seen as the spenders. But by 1995, practically every consumer goods industry was advertising to children. According to Marketing Daily, children ages four to 12 influenced $50 billion of their parents’ spending in 1985, and by 2010, it was $216 billion in “buying power.”
Our children are not only being targeted with commercials during their favorite television show or ads on their handheld device during video gaming time, they are even targeted when downloading “free game” apps. (The game is free, but if you want access to the extra coins, jewels or weapons needed to win, that will cost you.) So, the question remains: Is it possible to counteract the media’s message of “you must have what we are selling” to enable the development of fiscally sound beliefs?
Money and Materialism
Tim Kasser, psychology professor at Knox College, and Nathan Dungan, founder and president of Share Save Spend, completed a study involving 71 families whose children scored high on a series of tests indicating a high level of materialism. These families were then divided into two groups.
One group was given an eight-week intervention—providing skills on allowance tracking, a focus on giving, and ongoing family conversations about the connection between money and values. The second group was provided no intervention. The children from the intervention group saw a marked decline in their materialism scores, as well as an increase in self-esteem. In addition, these effects were still present eight months later.
Ron Lieber, author of the “Your Money” column in The New York Times, provides six suggestions on how to apply the principles of this study at home:
- Provide your children with a regular allowance and divide the money into the categories of spending, saving and giving.
- Talk about finances as a family and how all family members’ expenses affect the family as a whole.
- Make a clear distinction between wants and needs.
- Teach kids to recognize what drives them to want material things.
- Find a mentor who is good at keeping a balance between wanting, needing and spending.
- Keep the conversations about money going, remembering that material interests will change over the years.
Limits and Persistence
Between smartphones, tablets, laptops and other devices, children are exposed to an infinite number of marketing schemes and messages today. The American Association of Pediatrics recommends limiting screen time to one to two hours per day. Remember: less time equals less exposure, which in turn equals less influence. But even when parents do limit screen time, it is important to help kids develop an understanding of marketing, materialism and money management.
A final tool discussed by Joline Godfrey is teaching kids to question television or media authority. This can be done by pointing out some of the obvious ploys of marketers. Try to do this in a funny, not bossy way, and it will go over better. As parents, it is important to talk about these things with children. The world of media and marketing can be daunting to navigate—especially when it comes to helping our kids have a healthy understanding of it. Thus, the answer to our question is yes: with continued effort and persistence, parents can provide their children with skills applicable to handling our fast-paced, ever-changing technological world. iBi