A smiling teenager holds a credit card and looking for what to buy online
Stockplanets | E + | Getty images
In the era of instant gratuity where Gen Alpha has easy access to instant delivery services like Amazon Prime and Uber Eats, some parents wonder how to teach young money economics skills.
Born between 2010 and 2024, Gen Alpha is not like other generations. They grew up with smartphones in their hands and the possibility of shopping by clicking on a button.
In fact, their expense prowess is enormous. Gen Alpha spent 92 million pounds sterling (126.2 million dollars) between 2023 and 2024, according to research from the Gohenry financial technology company, which provides children’s debit cards in the United Kingdom, the United States, France and Spain. Gohenry published its report on the youth economy in September 2024, which provided data from 311 832 Gohenry Kids.
Much of this money goes to online services, with Gohenry Kids spending more than 3 million pounds of sterling in food delivery services, up 113% compared to the previous year. In addition, almost half like to make purchases on social media platforms like Tiktok Shop, Facebook Marketplace and Instagram.
Their economic imprint should reach 5.46 billions of dollars By 2029, according to the McCrindle research firm.
“The convenience and speed have become the standard,” said Louise Hill, founder of Gohenry, in CNBC, part of an interview. “One of the things we need to remember when we think of Gen Alpha in particular is that they are completely used to everything that is available at a switch, with a click of the button, and this leads to different behaviors with money.”
Hill explained that despite the influx of online financial education resources, there has also been an increase in products and applications that are easy to use, such as credit cards, purchasing-payment-plus and contactless payments. This makes more complex for parents to navigate money skills to children.
She stressed the importance that children understand “that money must be earned before it can be spent”, then spend it with thought and consideration.
To earn “tangible” money
Hill said it was crucial for children to see the “tangible aspects of money” like physical money, to understand its value. Giving “regular pocket” is a solution, to give 50 pence per week to 5 pounds.
“You give a child 50 pence and choose a day of the week that works for you with the family for Pocket Money, it could be on Saturday, so you can literally give them 50 pence every Saturday. It’s incredible how fast they start to make” Oh, look, it’s every Saturday. If I save four Saturdays. “”
The management of physical money allows children to know how much their favorite articles cost.
“You can give a child to a child, then he can have the concept of how many parts are exchanged for a bag of candies, compared to a larger toy,” said the founder of Gohenry.
For adolescents, Hill proposed the “pizza budgeting” method, which allows children to visually understand how much money is in the management of a household and the payment of invoices.
“The pizza is your money pot, or your salary, or your pocket money, then get the child to pass:” Would you like to guess the size of a pizza slice to cut if it is the salary of households? What is the size of a slice we need to make it to pay the rent or pay for the mortgage? “”
As pizza becomes more and more small, it creates an understanding of the amount of money that remains for leisure spending.
Include children in money conversations
Children are like sponges and tend to absorb attitudes concerning their parents’ money, so Hill thinks it is good to keep them in the household finance loop.
She offered the example of the cost of living crisis in the United Kingdom after the COVID-19 pandemic, which was largely cited in the media. Gohenry began to hear customers that their children were concerned about the cost of living crisis.
“The children do everything in this kind of situation where perhaps with the family, you are stressed by money,” she said.
Parents can talk about money difficulties without raising the exact problem, as if they cannot pay the rent.
For example, Hill said that if you could no longer allow yourself to take away every Friday evening, then involve children in the manufacture of a “fakeaway”, which means taking a take -out point.
“What to do with the children in the manufacture of a pizza and the choice of their garnishes? Maybe even go to the supermarket with you and pick up these fillings instead of paying the money to take away and show them how much money is saved,” added Hill.
This can help children feel more in control of their money expenditure habits and learn to tighten their belts when they need them.
