Piggy banks don’t teach money management skills. One could say that piggy banks encourage spending.
After all, they are the cutest storage containers, but no better than a paper bag or mayonnaise jar for storing money.
Piggy banks encourage what I call the “cash in hand” syndrome. Without tracking the amount of money in a piggy bank, a kid has no way of knowing how much there is without counting. This puts the cash in the kids hand, triggering a strong desire to spend!
Now there are the new breed of piggy banks with new wrinkles that claim to make them more useful or more “educational.”
Meet the multi-chamber piggy bank. How does a kid know how much is in each chamber? Without recording the numbers somewhere?
Then there is the counting piggy bank. Good for coins, not so good for counting paper currency, without writing the numbers down?
Add some mechanical gizmos. Press the pig’s snout and tip it forward to release money from the mouth. Remove a piece at the back to remove money or insert dollars. Manually lower the counter to show the new balance.
While these piggy banks do a great job holding money, do they teach money management skills? Do they do help kids learn to manage money as a number?
The money in an adult bank is always a number; $300.15 or $1,234.56 or $65.21 or -$25.33. The balance goes up or down depending on deposits and spending choices.
What if your child kept a written record of money in a notebook or a computer spreadsheet? What if your child sees the number showing that the balance was $10.32?
Spending money now becomes an exercise in subtraction, making the balance smaller.
Depositing allowance makes the number bigger through the magic of addition.
Piggy banks don’t show kids that there is a bottom line. By setting up a system as explained in The No-Cash Allowance, your kids start to see the big picture of their money.
Paper and pencil can be the most effective tools to teach money management skills. Managing money as a number is one of the best lessons that your children can learn before they leave home.
Lynne Finch helps parents teach their kids about money from piggy banks to online banking. Buy The No-Cash Allowance today and follow Lynne’s common sense approach for teaching children that money is a number.