Your Kids Need to Outgrow Piggy Banks

Reason Number 6: Why Piggy Banks Don’t Teach Your Kids Money Management

It’s no surprise that piggy banks are loved and adored the world over. Money is a big deal to a kid. That cute little container is usually the first connection a child has to having and storing money.

A piggy bank gives a child a sense of ownership about money. When those coins drop through the slot, a child thinks, “This is my money.” That physical sensation of seeing and touching cash is an important part of learning about our monetary system. A piggy bank is part of growing up.

But learning to manage money in today’s world goes well beyond coin and currency into the ever-changing world of cyberspace. Transactions happen in the blink of an eye with swipe of a plastic card or a few clicks on a keyboard.

So even as we try to make them more educational, piggy banks don’t teach money management. Why? Because piggy banks are cash only in a society that uses many other forms of spending in which cash is invisible.

A piggy bank is not a bank. As storage containers, a piggy bank is no better than a paper bag or mayonnaise jar. Even with bells and whistles, a piggy bank only stores (and maybe counts) money going in.

A piggy bank doesn’t read checks. How can storing cash in a container help your kids learn how to keep track of a balance as is needed to manage a checking account?

A piggy bank can’t do math. A piggy bank, even one with a counter, can’t subtract withdrawals and adjust the total or print out a receipt like an ATM machine.

A piggy bank can’t process debit cards. Debit cards are the new cash, even though they don’t look or feel like cash. To use one requires thought and knowledge about one’s account balance. A piggy bank can’t adjust the total with a physical recount of the remaining cash.

A piggy bank can’t pay a credit card bill. A credit card lets you borrow money from someone else’s piggy bank. But there is no way you can pay a credit card bill with cash. Payment has to be done with a non-cash method such as check or some method of electronic transfer from an account with sufficient funds.

Piggy banks are for kids. Why don’t adults manage their money using piggy banks? Quite simply, because adults do not make purchases and pay bills entirely with cash. This is one of the biggest reasons why your kids need to start learning about the other money tools  that are taking the place of cash, specifically debit and credit cards.

Kids yearn to be like adults. Shouldn’t their money experience start moving them down the path to understanding that money is simply a number? Piggy banks have a revered place in childhood, but they can’t help a child transition to the adult world of non-cash money management.

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