How do you explain 'invisible' money to kids these days?
For someone in their 20s, it’s weird to play the Walter Matthau/Jack Lemmon-“You know, back when I was a kid …” card on things already.
But man, back when I was a kid …
Over the past ten years – especially the last five or so – the methods in which we deal with money have largely unhinged themselves from the way past centuries did.
Money was always a tactile thing. I want something, I give you something. If you went to the store, you physically gave a retailer cash.
At the very least, you carried change. Grandfathers who still clang down the street pay homage to this wheezing custom every day.
Yet, with that, there’s an interesting issue here going forward: how do parents, in a world where cash – literally, the material manifestation of a dollar – will become less and less, teach their children the values of money?
Back when I was a kid, we used to have a toy cash register. It would lock itself after it closed so I knew, after I had put something in, whatever had gone inside was important. Worth holding onto.
Now, how are toddlers supposed to grasp money? To them, a strange swipe of plastic magically produces whatever is desired. To them, it’s like a free, all-access pass to the world.
So, how will this translate to them when they’re older?
This question is a ki nd of rhetorical for now because, frankly, I don’t have an answer to give you. The hypothetical was asked over at the Consumerist too, and rational conclusions could only trickle in. People simply don’t know how this will play out yet.
Some Consumerist readers suggested using cash more so their kids could see money physic ally change hands, but is it plausible – in 2009 – to abandon the convenience of plastic?
How are young parents handling this now? How would you explain “invisible” money to your children?
Posted by: Dave Brown | Nov 7, 2021 10:15:34 AM
The better question is how do you explain to kids fiat currency, which allows fractional reserve banking without limits on the growth of the monetary supply, which inherently leads to unsustainable "bubbles" in asset and capital markets that are vulnerable to speculation by highly leveraged hedge funds and other institutional wealth managers?
As Friedman espoused, since debt and the interest on the debt can only be paid in the same form of money, the total debt (principal plus interest) can never be paid in a debt-based monetary system unless more money is created through the same process. {eg: if 100 units are created and loaned into the economy at 5% per year, at the end of the year 105 units will be needed to pay the loan and extinguish the debt. However, since the additional 5 units do not yet exist, it too must be borrowed. This implies that debt must grow exponentially in order for the monetary system to remain solvent.}
Perhaps the concepts should be delivered by an animated character from Treehouse TV to resound more strongly with 7 year olds?
Posted by: S.Clark | Nov 7, 2021 4:19:57 PM
As a single parent that was *less* than good with money throughout my youth, teaching children about money is CRUCIAL, in my mind. I'm not going to blame parents, schools, etc, but quite simply, I clearly "didn't get it", and I am still paying for those mistakes a decade later!
A program was suggested to me by a friend, that teaches kids to be responsible with money, and puts them in control of their money. It's a fun, interactive booklet + personal website that makes tracking their money fun - more importantly, the tugs on the pantleg going through the grocery checkout and the tantrums have all but disappeared! I guess that's a little self centered of me... but any parent knows those situations all to well. For the record, I too used to do this to my parents, I was apparently horrible to bring into a store... oops!
If anyone is interested, the program is designed by KidsWealth: http://www.kidswealth.com (hope it's OK to post URL, I put it in my comment description to).
Just my .02c (no pun intended) !!
Posted by: teppy | Nov 9, 2021 9:54:24 AM
Ah, this is there whole game plan. Every commercial is "Buy now and pay later" almost as if they are brainwashing people. You have to start with kids at an early age and basically brainwash them to not waste there money on "stupid" spending like take out and timmies, how much it adds up over weeks and years. I remember my father always telling me "if you don`t have the money to pay for it-you dont buy it". And to this day it echos in my head "Don`t pay interest". We all know teenagers though, they go through stages where they think they know more than there folks!!!
Posted by: someone | Nov 9, 2021 11:43:20 PM
My kids toy cash register came with a toy plastic VISA card.
Posted by: Sherri | Nov 10, 2021 1:03:27 PM
To teach children about responsibility and money it is the job of the parent of first being responsible themselves with money and secondly, to not spend more money than is coming into the home. Children are sponges when it comes to what they see and the commercials on TV enticing children to want things and then induce thier parents to buy them are for the most part far too numerous to counteract unless one limits the amount of TV a child watches. With the easy access of credit cards and debit transactions the important thing is to make money real. Have cash around the house and set up chores on a commision basis. Pay your children what they earn. If they don't work they don't receive the benefits of buying what they want. The less worked the less money to spend. Set it up exactly how adults should treat their money in the real world...if you don't work you don't eat. This will teach them the value of hard work and also give a sense of accomplishment to your children. My eldest asks if she can do stuff because she knows that she can save her money earned to buy what she wants (within reason, of course). If you give kids an allowance first expecting them to do the work(chores) afterwards, you foster a sense of entitlement that may reach into adulthood. If they sit on their butts long enough someone else will do the work. And what have they learned? They can still be paid and someone else will get the job done. Moms, I'm speaking to you. My son, he doesn't really care about money, so he needs anopther form of encouragement for chores. But you find what works for your kids and go with it.
Posted by: ahummerz | Nov 11, 2021 5:50:12 PM
Just say this to your kids "This is the greatest Magic act" the so called leaders ever devised its in 1 hand and out the other what happens in between nobbbooody seems to know???????? Gotta love it!!!!!!
Posted by: Lisa | Nov 12, 2021 6:56:44 PM
I started direct depositing the kids allowance into their bank account, and gave them both their own debit card. They were 7 and 9 when we started last year. They are expected to check their receipts against their bank statement every month. They are much more responsible this way, and less likely to spend frivolously.
My kid do not get paid for chores, they are expected to do chores as part of our family, but can loose their allowance as a consequence of not doing chores. I didn't want them to think that they were going to get paid for everyday activities.
They are much better now at saying I want a "xyz", I have to save my allowance for "x" number of weeks to achieve this. I also expect them to donate to a charity, and to buy gifts for Christmas out of their allowance, and I help them budget to do so.
I am pleased with how well this has worked for us.....