From Gratitude to Entitlement
Tweens, money and habits.
by Nathan Dungan

PARENTGUIDE News March 2004

“If someone gave you $100 with no strings attached, how would you use it?” As soon as I posed this question to a fourth grade class in suburban Philadelphia, the surge of energy was palpable as their minds spun with the overwhelming number of possible answers. My objective— to see how their financial habits (i.e. how they share, save and spend money) were taking shape.

Consider the following:
1. There are nearly 80 million young people under age 25 in the U.S.— almost one-third of our population.
2. They spend and influence the spending of more than $1 trillion a year in our $10 trillion economy.
3. Young people spend five times more money than their parents did at the same age— adjusted for inflation.
4. The average 21-year-old has been the recipient of more than 23 million ad impressions (i.e. spend messages) during their lifetime— that’s roughly 3,000 a day.

Young people are being “taught” to spend and influence household spending before they can form complete sentences. With a lifetime of purchases in front of them, the competition is fierce for shaping the financial habits of America’s young people. In fact, many consumer product companies frequently work with ad agencies and child psychologists to formulate strategies that exploit children’s emotional vulnerabilities all in the name of triggering a spending behavior.

A generation ago, the Federal Trade Commission considered restricting advertising aimed at children, but in 1980, Congress passed a law preventing such action. Since then, the amount of money spent by advertisers to reach children has increased by a factor of 20— from $100 million to over $2 billion a year. Children have become the hottest targets of today’s marketing dollars.
Our society is working overtime to addict young people to spending and the social and economic fall-out could be staggering. For an indication of what lies ahead, consider the financial habits of young adults in this mammoth demographic group:
• The average college student has three credit cards and $2,500 of credit card debt.
• 20 percent of college students have $3,000 to $7,000 of credit card debt— an increase of 60 percent in the last three years.
• Young people under 25 are the fastest growing age group filing for bankruptcy in America.
• Bi-annual research of high school seniors shows the overwhelming majority are financially illiterate.
Note that I have not yet mentioned the other two critical financial habits— sharing and saving— that are essential life skills for young people and for our society. That is because unless a young person has the good fortune of being taught those values in the home, those habits will likely suffer from extreme malnutrition.

We can do more. Young people need the village— families, nonprofits, educational institutions, the government and businesses— to stand up and take notice that everybody wins when they have a balanced diet of healthy financial habits. I call it the Share-Save-Spend system.

Curiously, the approach is not new. My grandmother who just celebrated her 94th birthday has been living the philosophy her entire life— Share, Save and then Spend. For her and others I have met, the success comes in the prioritization and in the routine. It’s not a philosophy they use when it is convenient, rather it is a lifestyle that defines the role money and things play in their life.

And for families today that have adopted the, dare I say, countercultural approach, the success has been significant. Young people who couldn’t keep two quarters in their pocket and repeatedly fell prey to the entitlement mantra are now managing their money and sharing their resources with great success and satisfaction.