Money matters

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Youngsters' ability to spend is well-documented, but kids are also becoming more savvy at making and saving money.

Radio Disney calls 6-to-12-year-olds KGOYs, or Kids Getting Older Younger, and Jim Pastor, VP-sales and marketing, says that while these young people still spend most of what they earn, many are saving their money and investing it.

In a recent online poll, Radio Disney asked listeners what they would do if they won $1,000, and "50% of the kids polled said they would spend it on themselves, 23% said they'd save it for later, 15% said they'd invest it and the remainder said they would spend it on someone else," Mr. Pastor says.

money to spend, save

Children certainly have the money to save if they're so inclined, as well as parents who put money away for them.

Young people aged 12-19 spent $170 billion last year, says Rob Callender, trend manager at Teenage Research Unlimited. But in the October 2002 TRU Study, 19% of teens said they have stocks and bonds, 9% have mutual funds and 8% have certificates of deposit.

Even before they reach the teen years, "Kids between the ages of 4 and 12 have an annual income of more than $27 billion, of which they spend around $23 billion," says Janet Bodnar, executive editor of Kiplinger's Personal Finance and author of the book "Dollars & Sense for Kids." They save the other $4 billion.

"Kids are more sophisticated about finances because they have much more control over finances," Mr. Pastor says. "Parents have required this" increased sophistication.

An interest in investing crosses all age groups and both genders, says Rik Kinney, exec VP at NeoPets, an online gaming site that surveyed more than 3,000 of its young members for Advertising Age. "Kids have a defined interest in this area," he says, "and financial institutions and investment companies that take an interest in kids will be well-served in years to come."

young entrepreneurs

Mr. Pastor says parents are the primary source for teaching young people how to invest, and this is borne out by NeoPets' Youth Study 2003. At the same time, Web sites, some developed by financial institutions, have sprung to help young investors, and now a magazine is increasing its efforts to inspire teens to behave like entrepreneurs.

Earl G. Graves Ltd.'s Black Enterprise last October introduced Teenpreneur, a pullout section that gives a teen perspective on investing and starting your own business.

"We couldn't wait until [kids] were out of college to do it," says Alfred A. Edmond Jr., senior VP-editor in chief of Black Enterprise.

"My focus is: Can we get the advertising community to buy into targeting our market through Teenpreneur to the point where it becomes a stand-alone publication," says Lawrence Cooke, VP-national ad director of Black Enterprise.

Several Web sites offer savings and investment tips for young people, including John Nuveen & Co.'s Kid$ense and Netstock Corp.'s KidStock. "You can't turn on TV without hearing about the stock market, and consequently kids are much more aware of what is happening financially," says Brandon Potter, director of marketing at Netstock.

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