Financial Socialization for Digital Natives: A New Way to Teach Children About Money

This study hypothesizes that there is a need to disrupt traditional methods by which families teach children about money and illustrates a design solution that could effectively solve the problem. In doing so, it explores how technology can play a role in children’s financial upbringing through a review of literature and a generative study conducted on 8 Toronto families with children between ages 5-12. Specifically, it explores what methods parents are currently using to teach children various financial life skills and why such methods work or do not work. The study reveals three major themes: 1) Children cannot fully make the connection between physical money they put in their piggy banks and digital money they see being used in the real world. 2) Parents find it difficult to consistently implement money practices at home such as chores and allowances, often due to time constraints and convenience factors. 3) Children get easily influenced by their peers and surroundings when it comes to their purchase decisions, making it hard for them to delay gratification. The project culminates in a conceptual design of an app that addresses these themes in the following ways: 1) Provides children a digital way to manage money that aligns with what they observe in the real world. 2) Enables parents to keep track of their children’s finances and implement money practices easily and consistently. 3) Helps children focus on their goals and make informed choices that supersede external influences such as peer pressure. The app works as a family tool, providing a way for all players in a child’s financial life (parents, grandparents, siblings and other significant adults) to work towards a common goal and pass on values and skills of money management between generations. This study and the accompanying prototype contribute to the field of children’s education technology and aid further research on the subject of digitizing financial education. Keywords: financial socialization, digital natives, money, children, technology, education, family, parenting, generation alpha, personal finance, apps