Save your children from the hidden persuaders

Do you know what 'menu engineering' is? I didn't until I found out recently from a social media post that someone sent me. It's a subtle yet pervasive form of manipulation that structures a restaurant menu in such a way that guests are guided toward ordering the most profitable items. The layout and language of the menu are not primarily about design and aesthetics but a carefully orchestrated deception. High-margin items are strategically placed in spots where they're more likely to catch the eye, often accompanied by visual tricks designed to draw attention away from less profitable choices. Pricing strategies, too, are part of this manipulative toolbox. The absence of currency symbols and pricing items just below a whole number are not mere design choices but psychological ploys to make spending seem less significant. However, there's nothing about menu engineering that makes it a unique example of the hidden persuasiveness of modern marketing. It's just an interesting variation on a common theme.

We live in an information environment where almost every single thing either actively encourages you to spend more or passively makes you aspire to buy more and own more. If, even as adults, you and I are prone to get seduced by this atmosphere, then think of what this environment does to a child's growing and developing mind. I could be wrong, but it's quite clear that a conscious deferment of consumption - which lies at the heart of saving and investing - is much harder for today's children and young people than it was earlier.

Almost two decades ago, I wrote that if you ask a child to choose between eating one ice cream immediately or two ice creams a day later, she'll invariably choose to have just one right away. But if you give the child a choice between one ice cream the next day or two ice creams the day after that, almost all children will choose to wait the extra day and get two ice creams instead of one. I think all parents know this. I, too, figured this out almost as soon as my daughter was old enough to ask for things.

Has this changed? I suspect that it has. The problem is that most of us teach children nothing about money. I find that grown children, even teenagers, have no real idea about how money works. Not only do they not know about earnings, savings, and investments, but they literally have no idea about the flow of money in society. People get educated, get jobs and start earning money, yet they need to learn the essentials of personal finance.

Teaching all this is as much a parents' responsibility as anything else. What happens when you buy something? What exactly does a bank do with your money? How do taxes work? What are investments? How do investments grow? How is money created? Why does the value of investments increase with time while that of a car or a phone decreases? Why were prices of things low in the past? Why will they be higher in the future?

As parents, we tend to shield children from thinking too much about money. This is a grave mistake. Spending on one's children is good, but teaching them about money is something that should not be ignored. This is the most important thing about personal finance, something which many never realise: Saving is not primarily about the arithmetic of returns and interest rates and so on but a way of thinking, a habit. Even if you think it is irrelevant, even if you are prosperous enough to buy anything for your kids, get them to start saving. Do anything, the returns are not important.

A person who saves even a trivial sum of Rs 500 a month is a fundamentally different kind of person than one who does not. Get your children to be that kind of person.