Category Archives: Kids Going Cashless

Kids going cashless. The bottom line is that money is a number. Simple as that. Maybe it’s time to stop giving our kids cash.

Yet, we continue to give our kids cash, even though in the adult world, the trend is away from cash.

But today’s kids are growing up in a society that is using less and less cash. Kids are already using virtual money in the form of gift cards and will most certainly be using virtual money as adults.

Perhaps, we’re teaching the wrong lesson to our kids when we continue to give them cash. Read The No-Cash Allowance to learn how to teach your kids to manage money the cashless way.

Mommy, What are Cashless Transactions? Here’s What to Say.

cashless transactions
Cashless transactions are everywhere. What do your kids know about how they work?

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.

 

 

 

 

Piggy Banks Don’t Teach Money Management Skills

Piggy banks don’t teach money management skills.

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.