Here’s a new question for parents to consider about allowances. Do kids need cash to learn how to manage money? Traditionally, kids receive cash allowances and spend as cash. Yet adults are using less cash.
Recently a mom asked me,“If I don’t use much cash, why should I give my kids a cash allowance?”
As more adults swipe, dip, or tap cards at the checkout today’s kids are not seeing much cash at all. They are also not seeing how the money gets into the account.
Kids see ATM withdrawals but don’t see deposits added as a number.
According to Statistic Brain a person visits an ATM 7.4 times a month and withdraws and average of $60. This is what a child sees. Kids don’t see that at least $400 in deposits went into the bank and was added as to the balance as a number
Swipe, dip and tab
Kids see swiping but don’t see spending subtracted as a number.
In a 2016 survey, payment processor TSYS asked over 1,000 consumers which payment form they prefer. Forty percent chose credit cards, while 35 percent selected debit cards, and only 11 percent specified a preference for using cash.
Today’s kids spend cash but don’t connect cash to a number because no one expects them to. With a method such as The No-Cash Allowance your child keeps track of allowance and spending as a number.
Learn how to manage money as a number
A seven-year-old child who records weekly allowances as a number will make almost 900 deposits before high school graduation. This hands-on experience combined with subtracting each spending decision teaches kids the bottom-line value of their money.
In looking at the changes in the past ten years, it is reasonable to believe that the cashless trend will continue. Future advances in technology and information systems will create new and different ways to spend and receive money.
In conclusion, the answer to the questions, “Do kids need cash to learn how to manage money?” is a resounding “no.”
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 that money is a number with kids as young as pre-school and continuing through high school.