All posts by Lynne L. Finch

“It’s time to teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children to manage money as a number starting with kids as young as pre-school and continuing through high school.

How to Give Your Kids Debit Card Experience

Give your kids debit card experience
Give your kids debit card experience

Today’s adults are using less cash when spending. They reach for a debit card instead.

According to a 2013 Federal Reserve Payments Study, the number of debit card payments increased more than any other payment type from 2009 through 2012.

What does that say about the likelihood that your kids will use cash when they grow up?

You can give your kids hands-on experience with the concept of cashless spending using their allowance. It’s easier than you think.

What happens when someone uses a debit card? At checkout the card takes the place of cash without having to get cash from a bank or ATM. With a single swipe, the account balance is updated faster than digging cash out of pocket or purse.

Debit card experience for kids

Here’s how you can give your kids that same experience using their allowance and a pencil. If your child is tracking allowance on paper they can shop with you using a virtual card. Think of it as your family bank’s cash  card.

The next time you take your child shopping, pay for their purchases with yours. Then have them subtract their purchases from their accounts. Your child just made a debit card purchase.

We did this while our kids were growing up. They had written accounts and could withdraw cash with me acting as banker. But when we shopped they more frequently preferred to shop with this approach.

Using our family debit system  was easy and clear for all of us to understand. What was most important to the kids was having the ability to buy stuff, they didn’t care if they were using cash or not.

In fact, most of the time they did not withdraw cash before shopping. Even at a young age cash was irrelevant and unnecessary for my kids.

As parents we can help our children prepare for their adult future by helping them understand how people spend their money. Debit cards are here to stay.

Give your kids a valuable experience with cashless spending by paying for their purchases and having them subtract from their account.

Learning to manage money that can’t be seen or touched is an essential survival skill for our kids. It’s a lesson that you can teach in your own home.

Lynne Finch helps parents teach their kids about money from piggy banks to online banking. ” Let’s teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children to manage money as a number starting with kids as young as pre-school and continuing through high school. 

Most Powerful Tool for Teaching Kids About Money is a Pencil

Kids manage money with a pencil
Easy to use for young kids

Forget the cute piggy banks, computer programs, games and books that simulate money management. Let the kids manage money with pencil and paper.

You already have everything you need to get started because the most powerful tool for teaching kids to manage money is a pencil. Require your kids to track their allowance on paper. The one rule is this: every money transaction is recorded as a number. If the numbers aren’t written down the money doesn’t exist. Period.

What can kids learn by keeping track of their money as a number?

  1. Numbers show how much money one has (balance).
  2. Depositing (earning) money makes the number get larger (addition).
  3. Withdrawing (spending) money makes the number get smaller (subtraction).
  4. Money can be spent as cash or check or credit card or debit card.
  5. Each spending transaction is subtracted from the total.

Here’s an example of the no-cash allowance in action in our home.

One daughter adds her weekly allowance and records the new balance. She announces that there’s enough to buy a new game. Her sister updates her own balance and asks me if we could stop at the bookstore.

I take the girls shopping and pay for their purchases using my credit card. When we get home they subtract their shopping expenses and update the balances in their accounts.

Throughout this experience no cash has exchanged hands yet everyone knows exactly what happened. Deposits were made, account balances got bigger, purchases were made and account balances got smaller.

Start by downloading allowance logs.

Grab a pencil and start using these logs to give your kids a real-world money management experience at home. Transform allowance into numbers instead of cash.

The basic account log works well with younger kids and the checkbook format helps older kids understand a standard checkbook register. Both blank forms can be downloaded and printed. The spreadsheet format is for use with computer programs that read .xls files.

Basic Account Log.  This log is easy to use with younger children. (download PDF)

Checkbook Format Account Log. The checkbook format is for older kids and uses TransType, Date, Transaction Description, Debit, Credit and Balance columns. (download PDF)

Computer Spreadsheet. Older kids can use a computer to update their logs. (download file)

Kids manage money with a pencil? Easy!

Money is all about the numbers! You don’t manage their money entirely with cash and your kids shouldn’t either. Start teaching your kids now that money is a number. It’s the best lesson you can give them before they become adults.

Lynne Finch helps parents teach their kids about money from piggy banks to online banking. “It’s time to teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children to manage money as a number starting with kids as young as pre-school and continuing through high school.