Kids in the Marketplace Series: Teens in the Marketplace

Revision Date: 9/8/2004
Maria Pippidis

Ask a teen to name a couple of shampoos on the market, he or she will probably list a half a dozen name brands. But ask a teen which one he would purchase and the answer will likely be, “which ever is cheapest.” Many teens know that most shampoos work the same way and, more importantly, no one will ever know which shampoo they used! On the other hand, this teen may be wearing the most expensive sneakers the store offers. How can teens be such practical consumers in one purchase and not in another. There really is a certain logic to this madness: teen logic.

Understanding teen consumer logic and training your teen to be a savvy consumer can be a balancing act for parents. Teens look like adults, but not all their emotional, mental, social and physical capabilities are fully developed. Rapid changes in their bodies make them sensitive to their appearance. Product choices and how they spend personal money are external things in their control and they like to experiment with this control. The importance of image, friends, and acceptance create a conflict between marketplace best buy practices and buying an image. Change and conflict are dominant themes during the teen years. Advertisers marketing to teens have been quick to recognize the changes and conflicts teens face growing up and have planned products and marketing strategies to attract teens. Their aim is to get kids to buy more.

When You Don’t Agree

Parents need to plan strategies to help their teenager through the teen years. This means finding ways to build strong money management skills and giving opportunities to practice marketplace and independent living skills. Parent-teen tensions often explode and seem to undermine past training. How can you avoid getting caught in the crossfire? First resign yourself to conflict and learn to pick your timing. Don’t be afraid to assert yourself as the adult in important situations. Teens may protest, but they need the stability and consistent behavior of adults as a reference point.

There are four basic conflict themes that affect teen emotions, social relations, and marketplace and money management decisions. The first is the need for independence and self-sufficiency counterbalanced by the strong desire to belong. This behavior evidences itself in parents becoming “stupid” overnight and the desire to break away from family influences. The flip side of independence is a strong attachment to friends and a social network.

The independence from family often accelerates into a second area of conflict, that of rebellion. This rebellion is against adults, established and expected behaviors, and contrasts sharply with the need to conform to peer expectations. Teens are more able to understand abstract ideas and examine more closely the interactions of adult society and the environment. They are thinking through values and concepts you have taught them. They may seem to do the opposite of what you have taught them. This is because they are exploring how the value affects them and if it is one they want to believe in. They want to know what happens if they don’t hold that value or practice that concept. Are the consequences what you warned they would be?

A third type of conflict emerges as teens develop an idealism not matched by the real world. They are often upset by adult behavior and practices that are insincere and hypocritical.

A last type of conflict occurs between their own self-absorption and a developing maturity to be considerate and thoughtful of others. You may find your generous, thoughtful thirteen year old suddenly can only think of his appearance and of the number of pimples on his face or the impact of his new CD on friends (never mind that the sound can be heard outside the city limits).

What’s An Adult To Do?

How do you maneuver through this maze? Use money and shopping discussions to communicate with your teen as an adult. In younger years, your kids liked to hear your advice, now you need to listen to them. Give advice only when asked for, and then sparingly. Because they want to be treated as an adult, the teachable moment is here for many types of consumer experiences: automobile purchases, insurance, food shopping, credit, apartments, and telephone service. Teens will soon be on their own as new adults, so now’s a good time to review the list of skills they will need for independent living. These skills include: making and sticking to a budget, saving, credit use, shopping strategies to get value for dollars and time invested, where to find product information, and how to solve consumer problems. How does your teen rate?

Encourage your teen to set both short-term and long-term goals. Teens have the capacity for the abstract and can defer satisfaction if the goal is compelling enough. Short-term goals might be to save for a concert or a school trip. Longer-term goals might be saving for an automobile (and enough insurance for a year), college or technical school, or a special trio. Be sure to talk about banking information including how to use a checkbook, different savings and investment options, the meaning and value of annual percentage rates and types of loans.

Teens are able to approach problems systematically and reason through alternative solutions. You will want to reinforce the decision making process and encourage comparison-shopping and negotiation in the marketplace. Any person who has this process clear in their mind can negotiate even the toughest consumer decisions. You may want to help your teen set personal limits that will help them achieve their goals. One limit might be to never make an unplanned purchase of more than $50 unless they think about it for a day.

In The Marketplace

One of the first concepts that preschoolers need to learn is that money is a medium of exchange. It doesn’t buy love, self-worth, importance, or real riches. Remind your teen that this concept is still true. Real friends, real love, real value (contrary to TV,internet and magazine ads) aren’t based on the car they drive of the clothes they wear. The market place has realized that teens have spending power and has targeted them with all kinds of implicit and explicit messages. Kids are continually bombarded with ideas and thoughts which conflict with the values and attitudes you have tried to teach. It has never been more important that you are consistent in what you say and what you practice.

Shopping skills you want to encourage are comparison shopping and brand evaluation. Listen when your teen talks about brand names and look for opportunities to have a discussion about the difference between generic and name brands. Name brand advertising implies social acceptance and a certain status. Teens are especially vulnerable to image advertising because of their need for peer recognition. This should be an adult to adult conversation. A good conversation about how money saved in one purchase means extra dollars to achieve another goal can give motivation to resist an impulse purchase or an expensive brand purchase.

Food Buying

Food shopping is a great way to emphasize the difference in costs between stores. In 2000, teens spent $10.4 billion on food and snacks for themselves. In addition, A Teenage Research Unlimited Survey revealed about 9 out of 10 teenagers shopped for themselves or their families and spent $47.7 billion on groceries and household products. In almost 70% of the homes where both parents- or single parent- work, teens did much of the grocery shopping. This important family task can give your teen adult status and save you time too. But it will cost your family dollars and your teen consumer skills if you don’t spend some time teaching some basic principles. Comparison shopping store ads and collecting coupons that match the grocery list are a couple of skills your teen should know. If your teen is shopping the local convenience of corner store, it’s costing you money and teaching your teen expensive habits. The difference in the grocery bill could be as much as one-third the total bill…that’s $33 for every $99 spent. Let your teen prepare the grocery list and do the shopping, but volunteer to drive them to the store with the best values. Give your teen an expenditure limit and let him make up the grocery list. This includes coupon clipping and organizing. Nutrition and ingredient labels, unit pricing, generic and name brand cents off coupon evaluation, and store choices are all opportunities to build on existing consumer skills. Maybe offer to let him keep the difference between the set budget and actual expenditure. Cooperative Extension has many food buying and nutrition resources. Call your local Cooperative Extension office and ask for a list. Resist the temptation to complain when he doesn’t buy your favorite brand of pickles. He’ll probably tell you they weren’t on sale!

Auto Buying

Most teens dream of their own automobile and the freedom it brings. This goal can be so intense, that you have leverage to teach all kinds of consumer skills. Purchasing a used car opens the opportunity for teens to practice goal setting and setting an automobile budget. The search for information ought to include viewing and driving a car within the set budget, estimate of routine maintenance and gas costs, credit and loan applications, warranties and service contracts, fuel economy and other important car features. Credit contracts and insurance coverage will give new meaning to, “Read and understand everything BEFORE you sign.” A nationwide high school student consumer knowledge test found that almost half (47%) understood what a “sticker price” on an auto meant and only 35% knew what a car warranty would cover. Almost fifty percent knew what liability coverage and comprehensive coverage meant, but only 29% understood the significance of bodily limits.

Even if your teen does not own her own car, she will surely want to put a few miles on yours. Set limits and require gas reimbursement, maybe include oil change and windshield washer fluids. Always expect and demand courtesy in car usage including not leaving the car for someone else to drive on fumes. Not only might you expect your teen to contribute to family auto insurance costs, but also repairs depending on the extent of use and income from part-time jobs. Responsibility in product use is as important as product search and purchase.


Involve your teen in family discussions concerning mortgage rates, taxes, rental costs, landlord-tenant responsibilities, and utility expenses. The telephone may seem like another body part of your teen, but look upon it as a chance to help your teen understand the real costs of housekeeping. Make your teen responsible for his/ her own long distance calls. If conflict over telephone usage becomes intense, suggest your teen pay for a second telephone line in his/ her own name. While expecting your teen to pay so many family expenses may seem cruel and unkind (after all you are the parent) you’re really preparing them for adulthood. When kids have a high discretionary income, especially from part-time jobs, they can easily learn shopping and spending patterns that are beyond their ability to maintain once they are on their own. An understanding of true living costs will make it easier for them to develop good money management habits. Be careful not to bail them out financially in situations of their own making. Help them to identify alternative solutions to the situation they are in but let them be responsible for resolving the situation. This is a time to reinforce consequences of decision making and confirm the value of thinking before acting.

Banking and Investments

Banking and credit are two tools that help us manage our family finances. The more your teen understands about banks, other lending institutions, comparison shopping for credit, and loan options, the better chance they have of managing successfully. This can mean practicing with their own checkbook, balancing bank statements, and watching their savings grow. Take time to show your teen your checkbook and how you manage it. If your teen is considering financing a used car, encourage him/ her to make an appointment with the bank loan officer to talk about it. Savings options are important also. Discussions about news articles on the economy, stocks and bonds, investment ads, and other bank services will help your teen understand the wide variety of choices they have for investment.

In Conclusion

Teens enjoy adult conversations, especially when their friends are not around. Use this time to reinforce and praise consumer skills. Even when your teen says, “I can do it myself, I don’t need you,” he really means “let me try it and make my own mistakes.” There is no formula for helping your kids through these years, but here are some rules of thumb that can help:

  1. Be flexible; remember this is a kid trying to become an adult. It takes practice. Allow for mistakes and errors. Remember the mistakes you made? Share them.
  2. Be honest. Teens are idealistic and set high standards. This requires constant principled behavior form adults. Adults aren’t perfect, be honest and admit your poor habits and failures to your kids. Encourage them to do better.
  3. Listen when they want to talk. Try not to give advice, but help them work out solutions when they ask. Sometimes only experience teaches.
  4. Communicate clearly. While you want to listen and be empathetic to your teen, if there are household rules that must be obeyed, be clear about it. And enforce them with consequences for disobedience. Your teen still needs you to say, “no,” and be consistent.
  5. Be supportive. Your teen is practicing independence, but still need to know that his parents take pride in him and love him. Family is the support base from which teens can explore and experiment.

Encourage your teen to ask questions. Help them to frame the questions so they can get the answers they need to make good decisions. These questions can be about characteristics of products and services, about why they want to buy, about how a product works, about price, quality and value. Help them to think about how much of their income ought to be saved, what ought to be given to church and charity, what is necessary for basic living expenses. This may mean you will have to change how you make decisions so they will have a good role model. They can learn good habits from hearing you ask the salesperson questions, from seeing you write a company when you are dissatisfied with a product…from you practicing those same consumer skills you hope your teen learns.

Benchmarking Your Teen's Money Market Understanding - This is a survey/questionnaire which you can give to your teen to see their understanding of money and the marketplace.

1. Ju Nu Bryan Kim, “For Savvy Teens: Real Life Solutions,” Advertising Age. Aug 23, 1993 p.3-4.
2 Minnesota EFNEP Vol. 3, No. 1, March 1991.
3. “High School Student Consumer Knowledge” Consumer Federation of America and American Express, Sept 1991.
4. “Teen in the Kitchen” Food Industry News, September 1997.
5. Barbara White-Sax, “With Time and Money, Teens Represent a Sought After Market.” Drug Store News, 6/25/2001, Vol. 23, Issue 8, p. 68.

Additional Resources
Stephen F. Hamilton “Adolescent” available from Cornell Cooperative Extension, Media Services Educational resource center, 7-8 Business & Technology Park, Cornell University, Ithaca, NY.
“Money Wars” Zillions magazine, Consumers Union Feb. 93, p. 25-27.
Janet Bodnar Money Smart Kids, Kiplinger’s Books, Washington, DC. 1993.
Teenage Consumers “Teaching Your Children How to Save and Spend”, free SASE Consumer Federation of America, 1424 16th St., NW, Suite 604, Washington D.C., 20036.

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