For a long time now, we’ve known that social media – the access it opens up for young people and the power it can wield over their impressionable minds – is a double-edged sword. While on the one hand, it can expose them to cultures, points of view, and realities most of them would not have been able to engage with in real-time, on the other, it has a disproportionate impact on how they perceive and understand the world around them.
Netflix’s most recent global hit series, Adolescence, owes its popularity to the fact that it tapped into the universal unspoken terror that all parents, everywhere, feel sometimes, the most dangerous place for a child to be is their own bedroom, behind their phone screen. How do you protect them from that?
While only a scant few among us will encounter situations as dire as the ones that make headlines, it behoves us all to actively take steps to limit the influence that social media has on our children’s minds. One very often and easily overlooked aspect is how social media and self-styled influencers are shaping the way our children’s attitudes and understanding of money. It can be devastatingly corrosive because of how subliminally it is done.
A 2022 report found over 60 per cent of US investors under the age of 35 use social media as a source of information to make investment decisions. But a 2024 finfluencer study found that nearly 74 per cent of videos from finfluencers contain poor or potentially dangerous advice, and 81 per cent of videos with money-related hashtags contained unregulated financial advice.
Given the rampant flow of possibly misleading advice, a report found that 35 per cent of parents from India, 25 per cent from the USA, 14 per cent from South East Asia, and 10 per cent from the Middle East think that financial literacy is one of the most crucial life skills their kids need to learn to lead secure and successful lives in the future.
It’s evident that children need to receive financial education, that it needs to come from qualified educators and professionals with degrees and years of expertise, and that it is crucial to indulge in continuous socialisation and active engagement with the topic of money at home, with parents and family.
While this part requires some work, with some thought and planning, it can become a natural way of operating for a family. Here’s how:
Chore tracking with monetary rewards: You can offer them real or virtual currency for certain chores to impress upon them the effort it takes to earn money. For older children, you can even tie the monetary value of the chore to the timeliness with which they complete it: the sooner they get to it, the more they earn. If the chore involves additional effort (like waking up early in the morning to fetch milk or water the plants) offer them extra money for it. This will teach them how effort impacts the value of the work which is a key factor in the pricing of services. At the end of a specified period, ask them how they’d like to spend the money they’ve earned. More often than not, what children think they can buy and what they can actually buy with their earnings is vastly different.
Budgeting for family activities: Assign them age-appropriate tasks related to the family’s finances such as planning a dinner party within X budget for Y number of people. Older children can be tasked with something more complex – say buying groceries for a week – encouraging them to look for deals and discounts, and whatever they save can be their ‘commission’ earned.
Visiting local businesses and starting a mini one on their own: Take them to your local bank branch or a friendly business where they can observe how it runs in the real world on a daily basis. For older children, get them to translate their learnings and observations into an actual mini-business such as a stall in a weekend exhibition. You can even charge them a fee if they expect you to man the stall with them, and help them bake your salary into their pricing model.
Role-playing: Create scenarios where they have to role-play from different angles, serving different motivations. Say you broke your shoe and there’s just one shoe shop in the vicinity. What would your child do/say if they were the customer? Now get them to play the shopkeeper. What would their strategy be? This will help them understand money in the context of emergencies, managing it by planning for unexpected circumstances, and how a ‘want’ (new shoes) can become a ‘need’, depending on the situation.
Investing in self-improvement or hobbies: If they have a hobby, like say painting or reading, talk to them about how the ‘equipment’ they buy to further this interest can have value in the form of self-improvement. So in a way, they are spending not just on the product, but on self-improvement. For example: they can spend X on a book or a toy. While the cost of both is the same, the book will help them learn new words, which can help them score better marks in their essay in exams. So the value derived from the book is higher than the toy even though their cost is the same, which makes it a more worthy investment.
When it comes to financial literacy and children, the most important variables are honesty, introspection, and consistency. It is a journey to better financial understanding and smarter decision-making through continuous learning, not an absolute destination!