Money can be a very abstract concept for children, which only worsens in a more and more cashless society. As a parent you need to help your children understand money by making it tangible – this is how you do it.
Many parents are familiar with the challenges regarding the difficulty of getting children to get a grasp on money. 50% of parents find it difficult teaching children the value of 1 dollar, according to a survey from the financial institute T. Rowe Price. The survey furthermore illustrates that 81% of the parents primarily use credit or debit card to pay for purchases, where only 19% uses cash.
So the cashless generation is one thing, another thing is that it’s now not even just cashless, but also contactless. The contactless payment methods are spreading and now children are not even getting a chance to press the green button in the end of the payment knowing that this green button is the one which sends the money along.
Parents are therefore facing some challenges where children have to understand what money is, without even being able to see or feel it. So how do you as a parent handle this? One way is by utilising the everyday scenarios – many of these have a rich opportunity for you to educate your children about the size and use of money, and by that making it more tangible to understand where this digital money is coming from, and where it is disappearing.
At the grocery store
A good way to start your children’s understanding of what money is is by playing grocery shop. Put up a scene at home where you are handing goods across a desk – you give something, and you get something. For kids it’s easier to understand that purchasing something is a trade-off. Next step is that when you are grocery shopping in real life, maybe paying with your contactless payment card, you put into words what is happening when you are holding your payment card next to the credit card terminal. Explain that this action indicates that the money is now transferring from your credit card to the grocery shop, and that it’s actually the same as when you are playing grocery shop at home.
At the bank
You can make a trip to the bank with your children where you are handing in some saved cash. Count the cash at home before you go to the bank, and then afterwards show the children how the cash now is emerging on your bank account. Talk about that it’s the exact same amount as you handed in, and that it’s actually the exact same money just transformed into a digital form where it’s no longer possible to physically touch them. In this way you can help your children understand how money can transform from physical to digital money.
At the end of the month
Your payslip at the end of the month is a trade-off just as buying goods at the grocery store. This kind of trade-off is something that is especially difficult for children to understand. Next time you come home from work at the end of the month ask your kids what they’ve been doing that day, and ask them what they think you’ve been doing. Maybe they know that you’ve been at work. Try to specify which exact actions you’ve been doing at work that day and that the time you’ve invested in these specific actions is a trade-off where you as a reward for the time and actions get an amount of money at the end of the month.
Some of these scenarios can be difficult for kids to understand depending on their age group. So as a parent you should start with the simple scenarios and move on from there. With continuing small steps you’ll get closer to making the invisible money tangible.