Laying the foundation for good financial habits begins at an early age \u2014 often with a simple piggy bank. However, a team of Brock University researchers has found that when it comes to teaching specific saving and spending strategies, waiting may be worthwhile.<\/p>\n
\u201cSaving for a future purchase is fairly abstract for a very young child,\u201d Professor of Psychology Caitlin Mahy says of a recently published study she supervised.<\/p>\n
The research team, led by Psychology PhD student Ege Kamber, set out to explore how young children develop saving skills early in life through a simulation called the Saving Board Game, where preschoolers can save or spend a limited number of tokens.<\/p>\n
The researchers conducted the study last year at the Ontario Science Centre in Toronto. They recruited 254 ethnically diverse children between the ages of three to five years and their parents to participate in the experiment.<\/p>\n
The Saving Board Game, created in 2020 by Mahy and then PhD student Tessa Mazachowsky (BA \u201914, MA \u201917, PhD \u201922), consists of a computer screen displaying a town with several locations to visit.<\/p>\n
Each child was given four tokens at the start of the game. They were told they could spend their tokens on smaller stickers during the game or save three tokens for a larger, more appealing sticker they would receive at the end of the game.<\/p>\n
The children were then assigned into one of five conditions that gave them a strategy that was expected to improve saving performance.<\/p>\n
One of the conditions was a \u201ccontrol group,\u201d where children played the game without receiving any further direction.<\/p>\n
Children in the other four groups were given instructions that might lead them to save, including deciding beforehand how to allocate their tokens, keeping track of their spending and saving throughout the game, and trying to imagine how adults or other children might spend and save their tokens.<\/p>\n
\u201cChildren in these strategy conditions were expected to save more than their peers because they were given instructions that help them save more,\u201d says Kamber.<\/p>\n
While the team found older children were better at saving overall, there were no significant differences in saving results between children in the control group and those receiving instructions in the areas of budgeting, tracking and taking the perspectives of another adult or child.<\/p>\n
Mahy says the reason why none of the strategies were successful could be because \u201csaving tokens rather than items is quite abstract for preschool children.\u201d<\/p>\n
She notes previous studies in the field involved young children successfully saving marbles in simulation games.<\/p>\n
\u201cA token is a representation of money, whereas marbles might be easier to save because they are the resource itself, and not a representation,\u201d says Mahy.<\/p>\n
She recommends that parents be patient with preschool age children when it comes to saving their money.<\/p>\n
\u201cIt might be that three to five is just too early to try to improve young children\u2019s saving of money, or money-like representations,\u201d she says. \u201cIt might be better to speak with children more generally about the importance of saving and then wait until children are six or seven before trying to introduce specific strategies.\u201d<\/p>\n
In addition to Mahy and Kamber, the research team included Mazachowsky, Psychology master\u2019s students Madi Maguire (BA ’23) and Edyta Houshang Tehrani (BA \u201922), Kwasi Duah (BA ’23), and fourth-year Psychology student Maria Conversano.<\/p>\n