Piggy Banks Can’t Teach Kids About Debit Card Spending

by | Kids Allowances

piggy banks don't do debit cardsA piggy bank does not help our kids learn how to spend money they can’t see or touch. Kids see debit card spending at the store,  but do they have any idea what you are doing?

Using a debit card is like cash spending without cash. Unlike getting cash from an ATM, there is no visible money when you use a debit card. Yet, debit card spending is like a cash withdrawal.

Debit cards and kids

Kids who manage their money as cash are only learning to spend cash. When they see debit card spending they don’t know where the money comes from. They see a plastic card and a purchase. 

Do your kids know that you are spending money from your bank account? Do they know what that transaction does to your bank balance?

Teaching kids about debit card spending 

When my kids were young we discovered our own version of debit card spending. Our kids had no-cash allowance accounts for tracking their inflows and outflows. They saw their money as a number and knew their balance to the penny. 

When we went shopping I paid for our purchases together; they subtracted their purchases from their accounts when we got home.

What surprised me is that my children didn’t care if they had cash or not when we went shopping. All they wanted was to use their money to get what they wanted. 

My kids learned that every decision to spend made their account balance smaller. They also learned that when they deferred spending their account balance got larger.

The No-Cash Allowance account
debit card spending






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. 

  • Kids write weekly allowance in account and update balances. 
  • Parents take the kids shopping and pays for their purchases using parent’s payment method of choice. 
  • At home the kids subtract their shopping expenses and update balances. This is debit card spending 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 increase and decrease is a great learning experience.

Learning to manage money that can’t be seen or touched is an essential survival skill for our kids. As parents we can help our children prepare for their adult future by helping them understand what we are doing when we use a debit card. We can also give them some real-world hands-on experience with debit card spending by using an allowance system as explained in my book, The No-Cash Allowance.

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. 

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