The FTC announced this week that it has launched a program to help America’s “tweens” understand how advertising works so they can become critical thinkers and wiser consumers as they begin earning disposable income and saving for the future.

From a financial literacy standpoint, this move could pay big dividends down the road: Teaching kids to understand the promises and claims advertisers may set them up to make well-informed decisions about how to spend their money down the road.

Financial education is a big problem in the U.S. as many consumers struggle to spend within their means. Studies have shown that ads and the method of payment can have an impact on whether someone makes a purchase. Understanding how money works could help keep the next generation out of bankruptcy.

The FTC’s press release highlights some interesting items:

• Ads are everywhere: These days, it’s hard to get away from advertising – video games, TV shows, movies, web sites, phones and even the grocery store checkout line are jam packed with ads. Understanding how they work is crucial.
• Learn through playing: The website admongo.gov hosts an interactive game kids can play for free to develop some of the skills necessary for navigating an ad-laden world.
• Help from the schools: Creators of the Admongo campaign have also developed educational materials that educators can incorporate into classroom lessons to help their students develop a better understanding of the way ads function.

Hot the Financial Game Works

The online Admongo game has several levels that teach children a variety of skills they’ll need to recognize ads and understand how they work. The various mini-games allow kids to create an avatar of themselves and then explore various aspects of advertising, including the following:

• The Atrium: Gamers run around a city and identify the various ads they see – on billboards, buses, flyers, etc.
• The Assemblimator: Here, kids can look at the various pieces of an ad separately to understand how they work individually and collectively to persuade an intended audience.
• The Planadtarium: In this level, kids play to learn about the ways ads are targeted at various audiences and how those audiences are expected to react upon seeing the ads.
• The Adgitator: Here, kids can create their own advertisements to use what they’ve learned

The brilliance of this game is that it presents the problem of advertising as a puzzle kids can figure out. For parents, this can be an invaluable tool – how often have your kids begun asking for a toy, game or type of food they saw advertised during a favorite TV show?

Helping your kids develop these skills early may set them up to hang onto their money in the future – when advertising will likely get even subtler and more pervasive.

For more tips and tricks related to your finances, check out The Debtress blog.