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How Gen Z Spends
Nov. 23rd, 2020 11:37 amAs November is Financial Literacy Month, I thought I'd take a brief look today at the whole question of kids and money in the age of Covid-19.
My generation grew up with allowances or "pocket money". There was a certain elegant simplicity to that approach. If you were a kid who wanted some non-essential item, be it large or small, you had to make some basic decisions. Spend all your money now on candy or inexpensive toys, or put all or some of it aside, to be combined with future allowance dole-outs or birthday money until you had enough to buy that coveted item?
In elementary school from about grade two or three onwards, we also had a monthly banking day. We would bring to school any money we wanted to deposit in our accounts and the teacher would help us fill out deposit slips and put them with the money into little envelopes, that all got put into one big envelope and sent off to the Bank of Nova Scotia, which was running the school banking program in our area. In return, we were all issued little bankbooks so we could see the interest accruing. I think there was also a regular newsletter geared to kids' interests, encouraging us all to save up for a new bicycle or set of Lego or our first year's tuition at Oxford... well, you get the picture.
Cash really was king in those days. Nowadays, not so much. And the shift towards contactless payments and online shopping has only intensified since the pandemic began. This may not be too much of a problem for adults who are well-established in their lives and careers, but what about children? Not only have they had no opportunity to establish a credit rating but for younger kids at least, their world is centred around tangible objects and tangible risks and rewards.
Financial institutions have of course been quick to recognize the spending power, both current and future, of kids today, and are eager to indoctrinate them in consumer culture. There are now a number of pre-paid or debit cards out there specifically designed to appeal to kids, which means appealing to their parents too. It must be pretty overwhelming for those parents, even if they've grown up with a laptop on every lap as well as a chicken in every pot!
Here's one review article looking at some of the available options:
https://wellkeptwallet.com/debit-cards-for-kids/
While the reviewer is situated in the U.S., many of the cards she describes are available in Canada too. Some of them were developed in the U.K. or other places.
Canada.ca does have a page detailing the various pre-paid cards available in Canada, although I didn't notice any mention of which are recommended for children or teens under the age of majority:
https://www.canada.ca/en/financial-consumer-agency/services/payment/prepaid-cards.html
I've become somewhat comfortable with online shopping myself over the past few years, but I still prefer in-person shopping for most items (usually with a list) when that's possible. And there definitely are still disadvantages to shopping online - purchases that get lost or delayed in transit, are not what you envisioned, or are completely unsuitable and need to be returned. And near the top of my list, implications for privacy and security of personal information - something that is even more worrisome if you're considering letting your kids loose online!
My generation grew up with allowances or "pocket money". There was a certain elegant simplicity to that approach. If you were a kid who wanted some non-essential item, be it large or small, you had to make some basic decisions. Spend all your money now on candy or inexpensive toys, or put all or some of it aside, to be combined with future allowance dole-outs or birthday money until you had enough to buy that coveted item?
In elementary school from about grade two or three onwards, we also had a monthly banking day. We would bring to school any money we wanted to deposit in our accounts and the teacher would help us fill out deposit slips and put them with the money into little envelopes, that all got put into one big envelope and sent off to the Bank of Nova Scotia, which was running the school banking program in our area. In return, we were all issued little bankbooks so we could see the interest accruing. I think there was also a regular newsletter geared to kids' interests, encouraging us all to save up for a new bicycle or set of Lego or our first year's tuition at Oxford... well, you get the picture.
Cash really was king in those days. Nowadays, not so much. And the shift towards contactless payments and online shopping has only intensified since the pandemic began. This may not be too much of a problem for adults who are well-established in their lives and careers, but what about children? Not only have they had no opportunity to establish a credit rating but for younger kids at least, their world is centred around tangible objects and tangible risks and rewards.
Financial institutions have of course been quick to recognize the spending power, both current and future, of kids today, and are eager to indoctrinate them in consumer culture. There are now a number of pre-paid or debit cards out there specifically designed to appeal to kids, which means appealing to their parents too. It must be pretty overwhelming for those parents, even if they've grown up with a laptop on every lap as well as a chicken in every pot!
Here's one review article looking at some of the available options:
https://wellkeptwallet.com/debit-cards-for-kids/
While the reviewer is situated in the U.S., many of the cards she describes are available in Canada too. Some of them were developed in the U.K. or other places.
Canada.ca does have a page detailing the various pre-paid cards available in Canada, although I didn't notice any mention of which are recommended for children or teens under the age of majority:
https://www.canada.ca/en/financial-consumer-agency/services/payment/prepaid-cards.html
I've become somewhat comfortable with online shopping myself over the past few years, but I still prefer in-person shopping for most items (usually with a list) when that's possible. And there definitely are still disadvantages to shopping online - purchases that get lost or delayed in transit, are not what you envisioned, or are completely unsuitable and need to be returned. And near the top of my list, implications for privacy and security of personal information - something that is even more worrisome if you're considering letting your kids loose online!
