Cashless payment is kind of amazing.
The ability to tap and pay with your credit card only started in the 2000s.
Nowadays, it is ubiquitous.
And with it comes a loss.
A lost opportunity to teach our kids about money.
Robin Powell speaks about having three golden experiences at home that will make kids better with money.
Seeing and handling money
Experience is the best teacher.
Children learn better with tangible, real-life experiences.
This works for money too.
Children need to be able to see the money they are spending.
They need to watch as their wallet empties out after a recess.
The act of physically handing over notes and coins are a representation of money changing hands.
When we switch to cashless modes of payment, children lose these experiences.
They don’t get to see their wallets become emptier.
Bank accounts are abstracted away into numbers on a screen.
And children miss out on the pain of paying.
Talking about money at home
Why do Mom and Dad go to work?
Why don’t we spend all the money we have?
Where does our money come from?
All of these are questions that children will ask.
How many of these questions do we answer?
They’re complicated, and children probably won’t understand anyway.
So we don’t answer them, or give them simple half-truths.
And in doing so, we lose out on the opportunity for our children to understand money.
Money doesn’t grow on trees.
It is a resource that is shepherded from the bank account to the cash register.
It comes from the work that Mom and Dad perform.
And it has to be carefully balanced between our current wants and our future needs.
Let our children ask these questions. And let us answer them to the best of our abilities.
Give your children a chance to learn with an allowance
An allowance is a child’s chance to learn about money.
There is no substitute for actual experience.
Saving is a prerequisite for investing.
No saving, no investing.
No investing, no future.
Building a saving habit is one of the most valuable things a child can develop.
And an allowance is how children can develop it.
Cashless is moneyless.
Without cash, children won’t see the transfer of money.
They won’t understand that money is limited.
And they won’t understand how hard you have to work for it.
So before you go cashless, think about what our children will miss out on.
And give them a bit of an allowance to practice.
Preferably in cash.
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