How Online Currency Is Changing the Way Kids Spend Money
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Welcome to a special edition of Your Money Briefing for Wednesday, November 15th. I'm Arianna Espuru for The Wall Street Journal. What's your earliest childhood memory about money? Maybe it's breaking into your piggy bank or saving up for that toy you could hardly wait to get. Mine is a bit embarrassing. I'm in kindergarten, and my mom gives me a crisp $20 bill to pay for a field trip. But as soon as I step onto school grounds, I forget what it's for. So when I see a snack-sized bag of classic-flavored Lay's potato chips, I think, oh, I have to have it. I barter with my fellow classmate, and I get the chips for, you guessed it, $5. $20 in cold, hard field trip cash. After a stern conversation with my mom and probably a missed field trip, I'd learned an important lesson about the value of money.
It was my first time making my own financial decision. For kids now, learning about money is different in a lot of ways. They're learning more from the content they see online. Not just characters known for being cheap, like Mr. Krabs from SpongeBob SquarePants.
That sound, it sounds like the pitter-patter of money.
And big movies like Sing.
What did you say?
He said $100,000. They're still seeing those. But on top of it, they're watching YouTube videos and hours of TikToks, where everyday people get the chance to spend thousands, or even in the case of this video by the popular YouTuber Mr. Beast, a million dollars in a day.
All right, so you now have 24 hours to spend the $1 million. Are you ready? Yeah, I'm ready.
Nowadays, kids have access to a world of information, tools, and markets that weren't there before. And that's leading to a ton of new questions about how they're forming their financial habits. Over the course of four weeks in November and December, Your Money Briefing will be looking into what's influencing kids' ideas about money, some innovative ways they're making money now, and what they should know about how to take care of it. And while yes, a lot of this information is going to be aimed at kids, adults, it is not time to hit pause just yet. We'll be going over some ways to make smart financial decisions, even if you're old enough to drive. It'll be a fun time. So either sit down with your child, nephew, niece, grandchild or student or stay tuned for yourself.
Today, we're talking about how kids learn about money now and what that means for their financial decision making in the future.
How has kids' exposure to money changed compared with older generations?
That's after the break.
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To learn about how kids deal with money, we've got to start with how they learn about money. Margaret Echelbarger has been thinking about money for most of her life.
In fourth or fifth grade, I think I dressed up as a money bag for Halloween. So I've come full circle.
Now, as a grown-up, she's an assistant professor of marketing at Stony Brook University. She also has a background in behavioral science, and she researches how kids understand economic concepts and act as consumers.
Kids have a keen sense of how the world works before they're able to necessarily articulate in their words how the world works. And so some of their initial experiences that they may recall Related to financial decision-making are those where they're in the grocery store with their parents shopping.
In some of her research with the University of Michigan, the team found that kids as young as five had emotional reactions to money, things like spending it and saving it. and that these reactions could translate into their own spending behaviors.
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