Thrifty Thinking: Teens and Digital Purchases

It’s no secret - teens are shopping more online. Investment bank and asset management firm Piper Jaffray found in its annual report Taking Stock with Teens that teens, in particular, boys, are leaving traditional retail shops behind with the phone serving as the preferred platform as teens becoming more demanding on what, how and when they want to shop.

 

With music, gaming and video purchases accounting for nearly half of all purchases, Oink has continued to bolster their partnerships with video game companies on current and next generation payment solutions.

 

Founded by Dr. Jo Webber – a quantum physicist AND a mom who saw the need for a way to provide her kids with tools that would help teach them to spend wisely, save and give back – Oink’s Virtual Piggy serves as a digital family wallet (available online or via mobile devices) that allows safe, secure transactions – all within parental controls.

 

I had a chance to interview Dr. Webber about teen spending.

Why are digital purchases something parents need to be aware of?

In today’s era, there are many ways children can make purchases, and many places sites and applications that parents store their credit cards. With the children of the household often being the most technologically savvy, it can be a daunting task for parents to keep tabs on where their credit card is stored (think App Store, Amazon Prime, iTunes, etc.) and what logins that their children have access to. Additionally, if parents are assisting children with online purchases it can be difficult to always tell which websites are storing their credit card information for later use – meaning the children could make a purchase without even asking for the card information a second time. This is the perfect example of friendly fraud. In 2012, Piper Jaffrey reported over $11.8 Billion in friendly fraud alone – a significant portion coming from unknown gaming and handheld device purchases.

What guidelines do you think are important for parents considering giving allowances?

Parents have multiple methods for giving out allowance. While there is no right or wrong way to give an allowance, it is important to maintain consistency and encourage your child to have a plan in place for what they are going to do with their money. Some examples of allowance guidelines we’ve heard include:

1.)   Giving your child half their age in dollars each week. For example, a 14-year-old would get $7/week. This helps you set guidelines for how much money each of your children may receive at different ages, while also giving them something to look forward to as they grow and become more responsible with their funds.

2.)   One controversial but popular method for allowance is as a reward for grades. Some parents believe school is a child’s full time job and that it prepares them for receiving a wage for their efforts. This can is also a good segue to begin discussing having a savings plan in place for future education.

If you set an allowance and make sure your children stick to spending only the money they have each week, it’s a great foundation to begin teaching them how to spend within a set budget - an important principle to learn at an early age.

How can parents use digital products to help teach financial responsibility to kids and teens?

While there are a variety of digital products to help teach kids financial responsibility, it’s important to make sure you are giving your children a tangible experience that they can learn from. Products like Oink allows kids and teens to handle money within a parental controlled environment – fostering financial responsibility. We also encourage families to explore several of the financial literacy games available on the web such as bizkids.com.

 

How does Oink provide help for parents with encouraging financial responsibility?

Oink allows kids and teens to be able to manage their own money and make their own purchases within the limits that parents set. Parents are able to set up each child account with spending limits, and also approve or deny specific websites they feel are appropriate for each child. This allows parents to encourage financial responsibility by allowing their teens to begin handling money in a real-world setting and also begin feeling empowered in their own financial management skills. The Oink parent dashboard allows parents to review all purchases and budgets that their teens are making for themselves, preventing any unwanted digital purchases before they arise.