Digital Purchases by Children: A Growing Financial Challenge for Parents
In today’s digital age, parents face a new challenge that previous generations never encountered: unauthorized online purchases by their children. According to a comprehensive national survey of 2,000 parents with children under 18, nearly one-third (31%) have discovered their child made digital purchases without permission. These unauthorized shopping sprees cost families an average of $170, though nearly one in five parents (19%) reported their children spent over $300 without approval. While video games and fashion items topped the list of unauthorized purchases, some children went for higher-ticket items like computers, smartphones, smart watches, and cameras. Perhaps most surprisingly, a few parents even reported their children purchasing stocks and cryptocurrency without permission, highlighting how accessible complex financial products have become to young people in the digital era.
The survey, commissioned by digital personal finance company Achieve and conducted by Talker Research, revealed concerning gaps in parental oversight of children’s digital spending. Nearly a quarter (23%) of parents rarely or never check their children’s debit and credit card activity, while 11% rarely or never require their kids to obtain permission before making online purchases. This lack of monitoring suggests many families haven’t established clear boundaries around digital spending. As Brad Stroh, co-founder and co-CEO at Achieve, notes, “Overspending online can be a slippery slope for anyone, but it’s especially true for kids in an era where nearly everything is just a click away. Parents are busier than ever and struggle to keep up with monitoring their kids’ purchases.” This reality creates a perfect storm where children have access to payment methods but may lack understanding of the real financial impact of their digital clicks.
The core of the problem appears to be a fundamental disconnect in financial understanding. An overwhelming 72% of parents believe their child doesn’t fully comprehend the value of money. This disconnect becomes even more pronounced in the digital realm, with 44% of parents acknowledging it’s more difficult to teach children the value of digital currency compared to physical cash. When money exists primarily as numbers on a screen rather than tangible bills and coins, children may struggle to connect their online actions with real financial consequences. This digital abstraction of money creates unique challenges for parents trying to instill financial literacy. As digital payments become increasingly predominant in society, this gap in understanding represents a significant hurdle for raising financially responsible children.
Despite these challenges, parents are making efforts to teach financial responsibility through traditional methods like allowances. The survey found that 57% of parents provide their children with regular allowances, most commonly paid in cash (73%). On average, children receive approximately $119 monthly, though 14% receive more than $250. However, even with these structured approaches to money management, only 12% of parents reported their children never exceed their allowance limits. When unauthorized purchases occur, most parents (56%) address the situation through conversation, while others take more direct action—removing devices (23%), requiring repayment (20%), or restricting account access (11%). These varying approaches reflect the complexity parents face in balancing discipline with education when digital spending boundaries are crossed.
The survey also revealed parents’ desire for support in teaching financial literacy. A substantial majority (66%) indicated they would worry less about their children’s spending if they demonstrated understanding of money’s value. However, parents clearly struggle with effectively conveying these lessons, as 61% wished a financial expert could teach their children healthy spending habits. This admission highlights the challenges of financial education in a rapidly evolving digital economy. Many parents themselves grew up in an era of physical cash and in-person shopping, leaving them ill-equipped to guide children through the complexities of digital wallets, one-click purchasing, and subscription-based services that automatically charge accounts. The generational knowledge gap compounds the difficulty of teaching responsible digital financial behavior.
As digital commerce continues to evolve and integrate into every aspect of daily life, the need for deliberate financial education becomes increasingly crucial. Brad Stroh emphasizes, “There’s no single ‘right way’ to teach kids to have a healthy relationship with money, but the key is for parents to have a thoughtful, tailored, and consistent approach to their kids’ financial education. Starting conversations with kids about money early on will set them up for a more successful financial future.” The survey findings suggest that successful financial parenting in the digital age requires a combination of monitoring, education, and appropriate consequences. By establishing clear boundaries around digital spending while simultaneously teaching the fundamentals of budgeting, saving, and thoughtful consumption, parents can help their children navigate the increasingly complex digital financial landscape they’ll inherit. As online shopping becomes even more frictionless and digital payment options multiply, these lessons will only grow in importance for raising financially responsible adults.
