Smiling teen girl holds credit card and searching what to buy online
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In the age of instant gratification where Gen Alpha has easy access to instant delivery services like Amazon Prime and Uber Eats, some parents are wondering how to teach the young money-saving skills.
Born between 2010 and 2024, Gen Alpha are not like other generations. They grew up with smartphones in their hands and the ability to make purchases at the click of a button.
In fact, their spending prowess is huge. Gen Alpha spent £92 million ( $126.2 million) between 2023 and 2024, according to research from financial technology company GoHenry, which provides debit cards for kids in the U.K., U.S., France, and Spain. GoHenry published its Youth Economy Report in September 2024, which provided data from 311,832 GoHenry kids.
Much of this money is going to online services, with GoHenry kids spending over £3 million on food delivery services, up 113% from the year before. Additionally, almost half like to make purchases on social media platforms like TikTok Shop, Facebook Marketplace and Instagram.
Their economic footprint is expected to reach $5.46 trillion by 2029, according to research firm McCrindle.
“Convenience and speed have become the norm,” Louise Hill, GoHenry founder, told CNBC Make It in an interview. “One of the things we need to remember when we’re thinking about Gen Alpha in particular, is that they are totally used to everything being available at the flick of a switch, at the click of a button, and this drives different behaviors with money.”
Hill explained that despite the influx of financial education resources online, there has also been a surge in money products and apps that are easy to use, such as credit cards, buy-now-pay-later options, and contactless payments. This makes it more complex for parents to navigate teaching money skills to kids.
She emphasized the importance of kids understanding “that money has to be earned before it can be spent,” and then spending it with thought and consideration.
Make money ‘tangible’
Hill said it’s crucial for children to see the “tangible aspects of money” like physical cash, to understand its value. Giving “regular pocket money” is one solution, from giving 50 pence a week to £5 pounds.
“If you give a child 50 pence and pick a day of the week that works for you as a family for pocket money, that might be Saturday, then you can literally give them 50 pence every Saturday. It is incredible how quickly they will start to realize ‘Oh, look, it’s every Saturday. If I save up four Saturdays, I’ve got two pounds. And now I can buy X, Y, Z, if I save up 10 Saturdays.”
Handling physical cash allows kids to know how much their favorite items cost.
“You can give a child some coins, and then they can have the concept of how many of those coins get exchanged for a bag of sweets, versus a bigger toy,” the GoHenry founder said.
For teenagers, Hill proposed the method of “pizza budgeting,” which allows children to visually understand how much money goes into running a household and paying bills.
“The pizza is your pot of money, or your wages, or your pocket money and then taking the child through, ‘Would you like to guess how big a slice of pizza we need to cut out if this is the household wages? How big a slice we need to cut out of that to pay the rent or to pay the mortgage?”
As the pizza gets smaller and smaller, it creates an understanding of how much money is left over for leisure spending.
Include kids in money conversations
Kids are like sponges and tend to absorb attitudes around money from their parents, so Hill believes it’s good to keep them in the loop about household finances.
She offered the example of the cost of living crisis in the U.K. after the Covid-19 pandemic, which was cited widely in the media. GoHenry started hearing from customers that their kids were concerned about the cost-of-living crisis.
“Kids do soak up everything in that sort of situation where perhaps as a family, you’re stressed about money,” she said.
Parents can talk about money struggles without raising the exact issue, such as if they’re unable to pay the rent.
For example, Hill said that if you can no longer afford to have a takeaway every Friday night, then get children involved in making a “fakeaway,” which means making a takeaway at home.
“What about getting the kids involved in making a pizza and choosing their toppings? Maybe even going to the supermarket with you and picking up those toppings instead of paying the money for a takeaway and then showing them how much money is being saved,” Hill added.
This can help children feel more in control of their money spending habits, and learn to tighten their belts when they need to as they get older.
