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Teach children benefits of looking for best price
Published on Sunday, Nov 16, 2008
My 7-year-old grandson Aidan is a huge Star Wars fan. Imagine his excitement when he realized that, after weeks of saving the $5 allowance his parents give him, he had $40. That was more than enough for a General Grievous Starfighter advertised for $19.99 at a toy company Web site where he plays Star Wars-themed games.
Aidan wanted to buy the Starfighter right away, as any second-grader would. But my daughter, Veronica, used the opportunity to teach Aidan a smart-consumer lesson many adults bent on instant gratification could learn.
''I suggested we do a little comparison shopping first,'' Veronica said. ''We would look for the same toy at different stores to see which had the best price.''
At first, Aidan was skeptical. ''Different stores will have different prices?'' he asked.
To find out, Veronica and Aidan visited two toy stores near the house, but neither had the Starfighter. So they decided to ''bargain hunt'' on the Web, searching for sites selling the toy.
Aidan was amazed that five online stores — including the one where he first saw the Starfighter — had different prices. Veronica drew up a chart with the name of each store, the price of the toy, the charge for shipping and the total price (sales tax included), which varied by as much as $8.
The best total price, $21.66, represented a savings of $4.95 compared to the site Aidan first saw. Veronica put the Starfighter on her debit card and Aidan reimbursed her with cash from his piggy bank, including a meticulously counted pile of change to cover sales tax.
''I asked Aidan what he thought about what we'd done,'' Veronica said. His reply, while humorous, showed he clearly understood the concept: ''If one store charges $1 million and the other store charges $2 million, you buy it at the store where it costs $1 million,'' he explained.
Comparison shopping works for adults, too, of course. Veronica and her husband, Kyle, often go to two different grocery stores to take advantage of sales and everyday lower prices for products they buy regularly.
For children, comparison shopping has added educational benefits.
John Kessler, economics lecturer at Indiana University-Purdue University Fort Wayne (IPFW), told Veronica that comparing prices is a way to teach children that the choices they make have future consequences. It also is an opportunity to introduce the concept of opportunity cost: If
Aidan buys the General Grievous Starfighter, he cannot buy other items on his toy ''wish list,'' at least for a while.
Kessler suggests parents take their children to stores where prices are posted clearly. This will help the children understand how much different kinds of toys cost. It also will help them set goals, an important part of saving.
For children to truly ''get'' the importance of comparing prices, however, they must use their own money (such as an allowance).
''We spend our own money more wisely than we spend other people's money,'' said Kessler, director of professional development for the Center for Economic Education at IPFW. ''When the children can do what they want with the rest of the money, they're not going to spend as much.'' Aidan, for example, will be able to spend as he chooses the $4.95 he saved by comparison shopping.
Aidan enjoys setting goals and has no problem finding items for his ''wish list.'' More than a month has passed since he bought the Starfighter and he is ready to buy another toy. Veronica asked him where he thought he'd buy it, and he replied, ''The store with the lowest price, of course.''
Send questions or comments to Humberto Cruz at AskHumberto@aol.com or c/o Tribune Media Services, 2225 Kenmore Ave., Buffalo, N.Y. Personal replies are not possible.
My 7-year-old grandson Aidan is a huge Star Wars fan. Imagine his excitement when he realized that, after weeks of saving the $5 allowance his parents give him, he had $40. That was more than enough for a General Grievous Starfighter advertised for $19.99 at a toy company Web site where he plays Star Wars-themed games.
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Posted 06:07 PM, 11/17/2008
Great idea. High time we started a little preventative care for the "me" generation :)
Showing them comparison shopping sites like nextag.com can help as well, since they immediately see the differences. They can also catch on to more subtle nuances, like adding the base price shipping to get the true cost.
And eventually, they will seek out money saving tips on their own. Helps, as you said, when they are spending their own money.