The Balance between Saving and Spending

Mr. Dammler, you are a youth researcher and an expert in the field of children and consumption. What do you think – can children deal with consumption on their own or do they need more targeted instruction?

You're not born to be a consumer. Children have to learn about consumption just like everything else. I like comparing this with learning about traffic – children learn about behavior on the road first hand from their parents, then with more and more freedom. It is important that there is a guide for it. Parents must set the stage where childhood consumption occurs. It's one thing for them to make the money available. It's another to give children the freedom for them to test themselves. Pocket money is therefore a very important factor.

The Credit Suisse Pocket Money Study shows that children save a large portion of their pocket money. Does this also mean that they are automatically good with money?

No, one has nothing to do with the other. Some children who save simply don't have the opportunity to spend. For example: My daughters live in a village. There is no store where they could spend their pocket money. Other children get the opportunity to go to stores, but their parents shop for them. This takes away the opportunity for the children to spend their own money. That is a form of overprotection that we often see. Sensible saving means: The child consciously sets their money aside for later – but not because they lack the opportunity to spend it.

Nowadays, the temptation to spend money lurks on every corner. How do parents manage to teach their children the correct balance between saving and spending?

For one thing, it is important to note that saving is good if children consciously decide not to spend their money immediately. But if they simply don't get the opportunity to spend it, then they're not learning anything. Another thing children must experience is that money is not an unending resource. If I spend it, then it's gone. From an educational standpoint, children use pocket money to make self-determined consumer decisions and have positive consumer experiences in addition to negative ones. This is so that later, when it comes to more expensive purchases, children are not as easily tempted. After all, young adults must be able to budget their money.

What are your tips? How can parents teach their children about appropriately handling money in everyday life? What aspects require particular attention?

Pocket money is the core tool for introducing children to the topic. In addition, parents can actively encourage their children to deal with their wants by showing them their options. I always tried to get my children to consciously consider: Is this product really worth the price? By doing that, it is easier for children to see things with their own eyes. Example: Children see a crazy-expensive box of pralines. Then you can tell them, "For the same amount of money, you can get three chocolate bars – and then you'll have three times as much. Which option sounds better?"

Are there consumption cases where particular care needs to be taken?

Children are just as susceptible as adults when it comes to consumption pitfalls. They might want to have something that is popular at school or in the playground. But ideally, if they fall into the trap, they will learn from it. Because when the money is gone, it's gone. I'd rather have a child make a mistake with ten francs than have a young adult make one with a thousand. We must accept that children buy things that we as adults don't approve of. Here, it's important that parents don't give them any additional money. Otherwise, the child learns that no matter what I spend my money on, there are no consequences. This would be the opposite of what you want to achieve with consumer education.

The Federal Commission for Child and Youth Affairs (EKKJ) supports advertisement-free areas for young people and children, such as at sporting events. What do you think about that? Is it better to protect children from consumption?

For one thing, I don't think it's good for companies to go into protected areas like schools or sporting events in order to push their agendas. I am against any form of influence when it leads to students in protected areas, like schools, being influenced.
On the other hand, that's how many clubs and schools are supported financially. Some events wouldn't even happen without any corporate sponsoring. That's a fine line.
I don't believe in keeping certain areas free of consumption. It puts children under a bell jar, but at some point, they'll be old enough to come out of it.

As the father of two daughters, how do you talk about consumption in your family?

We've kept it practical. Our children get their pocket money transferred to their account. In addition, they have one "free shot" in the supermarket: When we're doing the weekly shopping, they're allowed to choose one thing they want – and one thing only. This means that if they have chosen a magazine and then want something sweet, they would have to put the magazine back. So that teaches them to make decisions. This is the main question that makes up consumer education: What should I spend my money on? This question will follow us our entire life.

In conclusion, can you tell us why people need to consume?

In this respect, we are still cavemen (laughs). In the stone age, it was rather special to find something like berries, for example. Today, it's the same: Every time we get something, our reward center is activated. We can't NOT consume, because we live in a society based on the division of labor. Whether we like it or not, we are born into a consumer society. So we need self-control: What do I really need, and what can I afford? This rationality is difficult for children. The purpose of this kind of education is to teach them that skill.