Kids, tweens and teens: Stress and the power of the piggy bank

The majority believes it is important to have money, work for their money and worry that they don't have enough money now to get the things they want. Adults? No, children ages six to 15. Today's kids, tweens and teens have internalized the prevailing U.S. adult attitude about the value of money and hard work. And, even as young as age six, they've begun to develop connections between the importance of purchasing power, cash on hand and their future earning potential.

Money woes

While 78% of six- to 15-year-olds have money to spend, nearly 60% of them worry about not having enough money now to do what they want. Twelve percent are actually stressed about it. While more children are bothered by parents and homework, money is as stressful to them overall as their relationships with their friends.

Looking into the future, 66% of kids, tweens and teens foresee the need for a substantial stockpile of cash as an adult. Even the majority (54%) of those who aren't concerned about their buying power now, believe a more than adequate supply of funds will be important to their future. Surprisingly, attitudes about the power of money develop very early on. About half of six-year-olds worry about their current and future purchasing power, and this focus only increases with age.

Whether worries of money spur them on to earn it, or whether earning it teaches them the importance of having it, the majority of children earn their own money either through part time jobs and/or household chores such as cleaning the house, cooking meals, ironing or tidying their room. Only 25% are given pocket money. Having and earning money is not reserved for older children – 72% of six-year-olds say they have money and the majority say they earn it.

Despite their belief about the importance of affluence, only 46% foresee that they will ever earn one million dollars. Children who have money or earn money now are more likely to believe they will earn $1 million (50%) than those who don't (32%).

Boys and girls think about and earn money differently. Boys are slightly more worried about their current purchasing power (61% versus 54% of girls), but are more convinced of their earning potential (51% of boys vs. 41% of girls believe they will earn a million dollars). Although as many girls as boys work part time (about 20%), more girls do household chores to earn money (between 12% and 32% of girls do specific household chores vs. 5% to 24% of boys.)

Kids, like adults, want immediate access to money and need to assuage their worries about the future by beginning to save and create wealth now. Some financial institutions have seized this opportunity, developing systematic savings programs aimed at children as well as stock and bond purchasing plans designed for children and their parents. However, given the size of the market, there is still plenty of room for innovative marketers to meet this growing need with new financial products and services.

Decisions, decisions

Despite differences in attitudes about it and how they get it, kids, tweens and teens are fairly unanimous about what they spend their money on: games. Sixty-three percent (63%) of six-to-15-year-olds buy games. Clothes (bought by 31% of kids) and CDs (bought by 27% of kids) are distant seconds.

Purchases vary slight by age and gender. Tweens and teens, with greater purchasing power and more diverse interests, buy a wider variety of things. While the percent buying games remains relatively constant, substantially more kids ages 10 and over buy clothes, shoes, CDs and books with their own money. Boys still predominantly buy games, but girls distribute their purchases more evenly among games, clothes and CDs.

Children primarily use their own money for fun stuff, while Mom and Dad's money gives them decision-making power about necessities. As a result, when children's discretionary purchases are combined with parents' necessity purchases, kids have the final say on about 50% more categories. Seventy-four percent make decisions about games, 55% about clothes and 43% about shoes. Not surprisingly, parents give tweens and teens more leeway, substantially increasing the types of things they make decisions about. Girls are also allowed to make decisions about a wider variety of things, but their broader decision range is balanced by boys' larger wallets.

In 2003, marketers aimed $508 million of advertising in pre-teen magazines and kids' television programs* against children's substantial purchasing power. Advertisers have honed in on kids' penchant for entertainment by dedicating more than half of their advertising in kids' magazines and the top two kids' shows on games, toys and videos. However, their ad spending on food and clothing/shoes is out of synch with children's purchasing decisions. Despite the fact that kids and tweens make more decisions about clothing and shoes, marketers dedicate less than 3% of their budgets to this category. In contrast, they allocate nearly 40% of advertising in the top two kids' shows and 27% of magazine spending on food.

five star hotel in EdinburghEven though manufacturers are reaching out to the tween and teen markets via other venues to capitalize on their growing focus on appearances, they are missing an easy opportunity to reach at least 39% of the kid (ages 6 to 9) market The open category space creates an easy opportunity for clothing and shoe manufacturers as well as retailers to reach these kids without having to deal with the clutter from competitors.

* Source: TNS Media Intelligence/CMR

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