Cashless transactions are everywhere. Could you pay all your bills with cash? Buying everything with cash? Probably not.
That’s because you manage money as a number. Maybe it’s time to start explaining to your kids what happens when you use non-cash transfers to pay or receive money..
In a world where cash diminishes in importance we continue to pay allowances in cash. Consequently, we sidestep the importance of teaching our kids how to manage money as a number.
Children need to learn through experience that money is not just a physical thing. In the broader sense, money is a medium of exchange and trust that represents an amount of spending power. Money changes form over the centuries and will continue to do so.
Money is coin and paper currency, a plastic card, or simply a number on your computer screen that is transmitted anywhere in the world. Non-cash transfers can easily and quickly move money from place to place.
In fact, your kids will manage all forms all forms of virtual money as adults, along with new money wrinkles that show up in the future. Many of them will be cashless transactions.
For example, according to MoneyTips debit card use is growing significantly in North America, outstripping average credit card use. Debit cards pay for many small purchases previously done with pocket change, such as a cup of coffee, fast food, and gasoline.
Where is the cash? Much of today’s money management is done without using cash at all. Look at your recent bank statement and see how many transactions take place without using any cash at all.
Start talking about cashless transactions
ATM–When you access an ATM you transfer a number into cash. Tell you kids how your money gets into the bank.
Check–When you write a check you give your bank written notice to transfer a number from your account to another. Show your kids a check and explain where your money is going.
Debit Card–These cards are replacing pocket cash. Tell your kids how the money get transferred from your bank account to the store.
Electronic Deposits–When you set up automatic payments you instruct your bank to transfer money to another account as a number. Tell your kids which payments you are making through EFT (electronic funds transfer) without using cash or checks.
Electronic Withdrawals–When you receive automatic deposits you give permission to another account to transfer money to you as a number. Explain which funds are being deposited into your account through EFT.
As parents we use an increasing amount of cashless transactions. Consequently, we can help our kids learn the new rules of the money game by telling them what we are doing.