I was watching a video on YouTube the other day where this fellow talks about an experiment he performed on his three children. The children loved to play monopoly and he noticed that each of them had a different strategy when it came to buying properties. He swapped the fake money out and replaced it with real money to see if they changed their strategy now that the money is real.
Two of the three children when faced with a ten-thousand-dollar pot altered their thinking now that they physically had real money in their hands. He realised up to that point that children don’t really understanding the value of money unless they can see it. And, good marketers know this by using technology to mask the feeling of spending actual money.
How many times have you bought something and used the paypass or paywave system (tap-and-go) without even checking the price on the screen? I learned that lesson when I stayed at a popular hotel some time ago and without looking tapped my card against the EFPOS machine not realizing the one-hundred-dollar overnight stay was coded as one hundred thousand. Good thing I didn’t have that in my account. Ever since then I always check.
In fact, companies make it so easy these days to tap-and-go that it becomes a real task to keep track of our spending in one day. In 2014 Apple was forced to refund more than thirty-six million dollars to consumers because they made apps that where too easy for children to make purchases in, sometimes without even knowing they did it.
In another blog post I wrote about Robert Kiyosaki, author of Rich Dad Poor Dad who says ‘money is an idea’ meaning you don’t have to have money in your hands to spend it or control assets. Some companies make it so enticing to use technology that they have mastered the impulse buying market.
Disney land make it so easy for children to spend money by creating what they call a magic band. This bright coloured band is worn by all the family and even opens your hotel door. Everything can conveniently be purchased throughout the park just by using this Magic Band. And of course, the items are added to your hotel bill. Ouch!
A cruise ship is another example. At the beginning of the cruise you are given an onboard card that you wear around your neck which you use to purchase food and drinks. It is darn near impossible to keep track of if you are a drinker.
The Commonwealth Bank some time ago did a survey and pointed out that one in ten kids don’t know the value of money. As parents, we shield our children from the financial hassle when we pay our dreaded bills and in doing so we deprive our children of lessons that are easily learned about living in a cashless society.
The problem with schools is that they teach children how to count, add and subtract but spend very little time teaching about financial success. The next time you get paid spend some time showing your children were all your money goes and have conversations with them about money. If you could go back to your childhood with the knowledge you possess now, what difference would it make to your life. Why not teach your children now, so when they are your age they are living financial free?