Tony the Tiger's Crowd Says "Buy This"

3/30/98 BOZEMAN - - Ever since Tony the Tiger first talked to kids, companies have been marketing directly to children.

And kids listen, too, so adults need to help even very young children gain insight into advertising and money, says Marsha Goetting, Montana State University Extension family economics specialist.

"You can’t blame older children for not understanding that money is limited unless you teach younger children about it," adds Goetting. A child will have no idea of why paying the rent is more important than buying a bicycle unless you explain it to them. A simple explanation of the importance of rent can be given even to very young children and expanded as they grow up.

Preschoolers are old enough to learn to choose between a set of alternatives, or you can give even a young child a small amount of money. The amount should be small enough that losing it won’t be a disaster. Enough to buy an inexpensive toy or picture book provides an opportunity for them to make choices between "important" alternatives.

"Once children are past putting pennies in their mouths, you can start teaching them," says Goetting. Have them choose between two treats. Or let them hand money to the grocer or play "Store." Teach them to put part of a birthday present in a penny bank or drive them to the "big bank downtown" so they can make a deposit.

By age 2 or 3, children may be tempted to take a toy or candy bar without paying for it.

"If the adult quietly and firmly insists that they take the stolen item back to the store because it wasn’t paid for, and apologizes to the store clerk in the child’s presence, the behavior usually isn’t repeated," says Goetting, though occasionally this has to be done a second or third time for the child to learn that the adult really means what they say.

Some form of allowance system is almost a universal experience for children.

"With an allowance, children can learn to plan for future expenses and set aside some for future use. An allowance should be enough to cover the expenses a child is supposed to pay, and have a little left over for optional purchases," says Goetting. "An allowance can help children learn that money is limited, that incomes first must cover needs, and that the family’s financial situation affects the amount of money each family member can use."

When beginning an allowance and at regular stages as children mature, parents should teach children how to set up a budget, keep records and set money aside for savings. Gear the information to the age and ability of the child.

When a child breaks something and the parent must pay for or replace the broken item, parents have another teaching opportunity. Even small children on a very limited allowance can pay a little toward the cost of the item

"Most child development and money management experts agree that it is not a good idea to tie an allowance to chores," says Goetting. However, because our culture associates work with money, parents may want to try a base allowance plus "wages" for extra chores.

Once a youngster is old enough to begin cutting the neighbor’s lawn, help her figure out how much money she will need to buy lawn bags, gasoline for the mower, put in savings toward the day when a new mower is needed, and how that relates to setting the price of the job.

By this stage, the young teen also is ready to begin developing longer-term financial plans, which leads very nicely into having their own bank account if this was not done earlier.

"Set reasonable limits and be consistent," says Goetting. To be consistent, parents need to be clear in their own minds about what they do and do not want their children to do with money.

"If video games aren’t allowed but a child uses lunch money to play video games, maybe that child has too much lunch money. Reduce the amount or have the child pack a lunch."

At this age, keeping communication open is very important, but that means discussions, not lectures, says Goetting. "Reasonable limits and honest explanations will help children develop money sense."

Send questions or comments to Goetting and Carol Flaherty, MSU Communications Services, Bozeman, MT 59717 or email them at carolf@montana.edu.

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