Kids think an ATM is a magical piggy bank. One bank survey showed that 40% of 5-year-olds believe you use a plastic card to get free money from a machine. Explain the real technology of ATMs to your kids
Kids believe what they see. For most kids their earliest experience with money is putting cash in their piggy bank. They know if they put money in, there is money to take out.
If they see a lot of cash in their piggy bank they think they have money. Yet, they don’t know how much money they have unless they physically count it.
Most ATM deposits are cashless
Do your kids see you put money in your bank? Most deposits are invisible to your kids. Electronic and automated deposits are money that can’t be seen or touched. This virtual money shows up as a number in your account.
Do your kids see you go the bank and actually count the money in your account? No, because you rely on online information and your records to know your balance.
Do your kids know that the number on the receipt is the balance in your account? Probably not. They see the machine spit out cash, but may not know that a number represents the balance.
ATM is a counting machine
The difference between an ATM and a piggy bank is accountability. The bank dispensing your cash keeps up-to-date records of your balance. With a piggy bank there is no easy way to keep track without counting and recording the balance.
Create an ATM experience at home
Parents can help their kids learn how keep track of money as a number like you do. The No-Cash Allowance is designed to do just that using an allowance system in which a child controls all funds received from parents through a written account initially kept in the home. Adults act as bankers and the child as account owner. This is similar to an ATM system.
Kids keep track of their allowance in a written log by recording each transaction. They see the numbers get bigger when they add money to their account. Then when they spend they see the number get smaller. Through repetition your child learns that money is a number that either grows and shrinks with each money transaction. No allowance apps needed.
No-Cash Allowance in action
- Kids write weekly allowance in account and update balances.
- Parent takes the kids shopping and pays for their purchases using parent’s credit or debit card.
- At home the kids subtract their expenses and update account balances–debit card in action.
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.
Part of the learning experience for your kids is keeping track of their money. Seeing the balance go up and down is a great introduction to cash flow.
If kids believe what they see shouldn’t they start seeing that their money is simply a number? You don’t need a magical piggy bank to teach kids money is a number. A no-cash allowance can.
Kids believe what they see. Let them see that money is a number starting now.
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Lynne Finch helps parents teach their kids about money from their first allowance 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.