Invisible money. Who would have thought that would actually become a thing? The reality is though in this digital age we’re becoming an increasingly cashless society. With that in mind, it’s becoming more complex to teach kids about money, particularly when technology keeps on advancing with new ways for money to exchange hands.
With fewer transactions being made with actual cash these days, it’s becoming harder for kids to work out how money works. Scary but true – kids often don’t realise that digital money is still real money.
Here are some key opportunities you could talk to your kids about money – both real and invisible.
It’s worthwhile explaining when you’re at an ATM that the money you’re withdrawing is coming out of your account – you had to work for the money and when you withdraw it the amount you have left is less. Explaining this over time can help reinforce the idea of financial responsibility.
If your child asks you to download a game or app on a smartphone or tablet, rather than downloading it and handing the device back when it’s ready, involve them in the purchase process.
Take the opportunity to explain to them how much it costs. If they get pocket money, explain how much it costs in terms of what they get – perhaps even deduct it from their pocket money. Or if they have a piggy bank full of coins, perhaps get them to pay the amount the game costs with coins from their collection.
In days gone by school kids would often have a passbook for their first savings account, where they could watch their balance grow over time ledger line by ledger line. With so many transactions happening online these days, you may consider opening them up a bank account online, so they can see their savings build up over time through online banking.
Open up an account that can be opened online and that you can use Online Banking to deposit money into their account. It’s a great way to teach the time-honoured lessons about saving and spending.
Giving pocket money to your child helps them learn about the value of money, providing essential lessons on how to spend and save responsibly. Pocket money works best when it's regular and consistent. A good way to do this is to set up regular payments to your child's bank account, which you can amend, put on hold and track online. By paying pocket money into your child's account, they can manage their money and track their own spending.
Why not keep the entire experience digital? Once you’ve set up a savings account online, help set savings habits with your child. You can hunt out what they’re saving for online and search different sites to get the best price.
Once kids reach a certain age they may be eligible for a debit card attached to their online bank account1. You could also get them a prepaid money card. You can load it up with a set amount; it’s also a handy way of kids taking spending money when they go overseas as debit cards are accepted worldwide.
1. For Choice youth account, the eligible card age is 8. For any other transaction account, the eligible card age is 14. You must have an Australian residential address.