Good money management is a virtue every child needs to learn. Everything is going online; the virtual market place is fast transforming and to some extent reducing people’s appetite for the physical market.
Early in the year, the National Bureau of Statistics (NBS) revealed that the volume of online transactions increased significantly. The volume of internet transactions rose 34.6 percent to 3.5 million in the third quarter (Q3) of 2016 from 2.6 million in Q2. Value rose to N0.30 trillion in Q3 from N0.26 trillion.
Although the NBS did not say anything about the age demography of the people spending the money, be rest assured that the demography will include teenagers and young adults. According to a recent Ofcom’s Media Use and Attitudes 2015 report, young people aged between 16 and 24 spend more than 27 hours a week on the internet. It is fuelled by increasing use of tablets and smartphones.
Nowadays, most parents are more comfortable allowing their teenagers to use smartphones and tablets partly because of the educational benefits they will derive. The Ofcom’s report notes that activities such as watching video clips online, playing games, instant messaging and social media are the major drivers of growth in mobile internet use. A study from Piper Jaffrey, an asset management firm, found that teens increasingly prefer to shop online rather than at the local mall.
As a marketing strategy, many companies have devised various advertisement campaigns to gain advantage of growing e-commerce appetite from young people. A teenager can pay for anything from stream videos games, shows and movies to ordering fashion accessories, gadgets; food etc, all he or she needs is access to money in an account somewhere. Social media is a major influence on what the average teenager decides to buy online.
One major spending habit majority of the teenagers have in common is that they are brand conscious but not necessarily brand loyal. Peer approval of purchases is very important, especially to girls. The Piper Jaffray report noted that friends had the most influence over teen purchase decisions and about 50 percent of both males and females said social media influenced them.
Depending on the arrangement you have in the family, it could be free access or limited access but the major headache will be to monitor what he or she buys while online. It is important; you have an idea of the spending decisions they have to make when online. Regardless of where the money is spent, a teenager should be taught to ask some basic questions, like ‘What can I afford?’
A rudimentary grasp of budgets will go a long way to set them on the path to better money management while online or elsewhere. The teenager should be able to figure out what their sources of income are; like allowance, a part-time job, gifts, handouts from relatives. Second talk about what that money can buy. To achieve this show them the difference between needs and wants. Needs are things that are truly essential while wants are things that are nice but not necessary.
The next thing to do is to guide them to set out money for the needs – essential everyday expenses and what they are setting aside for short-term goals like a concert, a video game etc. The long term goals may include a car, college fund etc.
Some parents are uncomfortable knowing their teenagers are engaging the e-commerce market. Rather than bar them from buying online, encourage them to download personal finance apps that enables them keep tabs on their spending habits. Teach them to hold out for sales whenever possible. Delaying to buy a product is a good way to avoid impulsive buying.
Since they are going to paying for purchases online, you need to make them aware of online security. If you are going to be paying the bills, ensure they know to ask for permission before using your card. You can also consider a single use credit card being offered by some Nigerian banks. You can set a spending limit which essentially allows you to give your child a fixed amount for online shopping.
All said and done, teach the child to safeguard their wallets when in public places. They should not shop on computers used by the public, like in a cybercafé. If you make purchases from your phone, use your data plan instead of WiFi. And always log out of your account after completing a purchase.
FRANK ELEANYA
