What Fiscally Fitter Kids Could Mean to You

Selling to Kids, Sept 29, 1999

The world isn't the only thing kids are learning to save. The likes of Merrill Lynch, MasterCard, college professors, even politicians are spending time and resources to teach kids how to build a nest egg before they leave the nest.

If these lessons about the importance of saving money and other aspects of financial responsibility sink in, and as they become more widespread, they have the potential to change the way kids view, spend and save money. That means you may need to change the way you'll try to reach them.

As financially educated kids get older, they won't be as likely to engage in wasteful consumption as those without the training, says Allen Martin, a professor in California State University's Family Environmental Sciences Department. He says they'll be more likely to wear a prom dress more than once (really?) or buy a used car instead of a new one because they've learned how to weigh the concept of good value versus status.

Money-savvy kids understand more than just balancing a checkbook, says Martin. They learn to set goals, to tell the difference between short-term and long-term goals and to delay gratification.

Take a highly prized status symbol like tennis shoes, Martin says. Fiscally educated kids are more likely to understand that the money saved by buying a pair that's $75 instead of $150 can go into a savings account. He says a parent can also use the example to teach good citizenship by asking the kid to contribute the savings to the family vacation (fat chance!). Although all this is probably bad news for those who market impulse items, it bodes well for marketers of big-ticket items.

Martin is working with his state's JumpStart Coalition for Personal Financial Literacy, a four-year-old national organization that offers resources, materials and guidelines on teaching students about income, money management, investment and spending (www.jumpstart.org).

The Coalition wants to extend mandates for personal finance education in high schools. More than 50 partners have signed on, including the big three credit card companies as well as Fannie Mae, iCanBuy.com, Money magazine and Salomon Smith Barney. organizations for which involvement in such a cause can only look good.

Extending the Teach

The credit card companies also have developed their own consumer education programs that target kids. For example, MasterCard International's initiatives include "Kids, Cash, Plastic and You," a booklet developed with the U.S. Office of Consumer Affairs to help parents coach their kids in money management. The company has distributed 150,000 of them to schools and credit counseling centers.

MasterCard also produces "Master Your Future," a video and curriculum guide for high school teachers that it has distributed so far to 22,000 secondary schools and organizations, and that 31,500 teachers have used, says Catherine Cummings, VP, consumer affairs. A new version of the video, which will go out to teachers next month, doesn't look corporate or have a company spokesperson in it, just the credit line "brought to you by MasterCard," she says.

Another JumpStart partner, Phoenix Home Life Mutual Insurance Co., was also a co-sponsor of a conference for kids spearheaded by Sen. Bob Kerrey (D-Neb). The conference, held in 1997, invited about 150 juniors and seniors from 78 Nebraska high schools to the one-day event in Omaha to hear financial advice from Kerrey and Warren Buffet, billionaire chairman and CEO of Berkshire Hathaway, Inc.

The conference will repeat Oct. 11 in Omaha, with the addition of Jesse Jackson, says Virginia Martin, VP, The Public Forum Institute, which helps to organize this and other policy events.

Stemming the Spending Tide

At least one company - which by law can't have kids as direct clients anyway - takes a jab at marketers while promoting its educational services.

"'Marketeers' are out there targeting the youth [and teaching them] to consume. We're fostering a generation of spenders through extensive advertising," says Jyoti Chopra, director of e-media and educational services at Merrill Lynch.

Since 1994, the company has been trying to counter the trend by "promoting responsible citizenship and financial literacy" for kids by focusing on age-appropriate issues that are relevant to them, she says. "It's yet to be seen if they grow up to become Merrill Lynch clients. That's not our objective here," she says.

For elementary school kids, the money message is delivered in the form of a comic book ("The Further Adventures of Savin' Dave and the Compounders") and a video. Middle-schoolers can play the company's "Money Matters" edition of "BrainQuest," a quiz card game, developed by Workman Publishing. For 9th through 11th graders, the company and partner Time School Publishing has developed and distributed 500,000 college-planning guides to schools.

Speaking of schools, the company sends in financial consultants to conduct workshops. And, with another partner, UNICEF, the company does public service TV announcements and curriculum materials.