Rosalind Evans
When my daughters reach the age of five, I’ll share a fun yet profound revelation with them: “Living in our home now comes with responsibilities.”
It might seem early to start imparting lessons about money’s value to a five-year-old. However, considering the modern influences they’re exposed to, it’s not too soon.
The digital age has seen children engrossed in screens more than ever. A 2022 survey by Common Sense Media revealed that tween screen time surged by 17% between 2019 and 2021. While the pandemic did influence this increase, the digital consumption trend hasn’t shown signs of slowing.
Children are constantly bombarded with new product suggestions through YouTube and various online influencers. For instance, my sister’s children, aged eight and ten, have conjured up wishes ranging from MacBooks to an exclusive gaming room, a luxurious Barbie RV Camper, and a dream vacation in Maui, all inspired by online content.
Despite regulations like The Children’s Online Privacy Protection Act (COPPA) prohibiting online services from targeting children under 13, recent studies indicate that certain platforms, such as YouTube, might still push ads to younger audiences.
With the advancement in artificial intelligence, children will likely be exposed to even more marketing strategies. Relying solely on technology to shield kids from these influences seems increasingly ineffective.
A more empowering strategy for parents might be equipping their children with the understanding and skills they need to discern the consumeristic digital world.
Introducing the Scarcity Principle to Children
I aim to introduce my daughters to the scarcity principle, which essentially means the rarer and more sought-after something is, the more value it possesses.
In the corporate realm, scarcity value can be linked to unique innovations and products. Consider the exclusivity of Nvidia’s chips or Apple’s iPhones. These are exclusive products with a massive demand, making them immensely valuable.
There’s also a concept of ‘artificial scarcity.’ A prime example is when certain products, like limited edition apparel, are hyped up to command exorbitant prices, even if their intrinsic value isn’t proportionately high.
Parents can constructively use this principle. Offering a moderate allowance tied to chores, or teaching children to save and budget for things they desire, can drive home the importance of value and effort.
Instead of simply deeming every wish “too costly,” parents can involve children in the financial journey, helping them understand that acquiring items takes planning and affects the family’s overall budget.
Such discussions can shed light on broader financial concepts, illustrating how expenses today can influence future savings and goals.
A strategy I’ve come across involves designating a specific day each month for children to voice their wishes. Then, shopping for ‘budget-friendly items’ can take place on a separate day. This not only helps curb impulsive requests but also creates an environment for ongoing financial discussions, emphasizing the effort and planning needed to fulfill desires.
In an era where the line between needs and wants becomes blurred, we must arm our children with the understanding of actual value and financial responsibility. By integrating these lessons into daily routines, parents can pave the way for a generation that not only appreciates the worth of their desires but also recognizes the effort and planning required to achieve them. As we guide our young ones through the labyrinth of consumerism, we not only teach them about money but also instill lifelong values of patience, hard work, and thoughtful decision-making.
