Why paper cash and coins are smart for kids
August 17, 2009 by Jennifer Chait
Filed under children's activity
Kids see an endless amount of plastic cards being used to pay for everything from groceries, to toys, to household goods, but they rarely see cash anymore. Older kids even get pre-filled debit cards from their parents to use vs. cash. The problem is this sets up kids to consider money as something that arrives in an endless supply so long as you don’t lose the card.
If you consider a small child’s point of view, it makes no sense where money comes from if you only see people pay with cards. It also makes less sense if you don’t explain the ATM and how it works (i.e. there’s not some major stock pile of cash in that machine).
Once in a while it’s good to pay with cash, if only so your kids can get an idea about limits. Garage sales are a perfect time to use cash. Go to the ATM with your child and explain why you take a specific amount out and also let him know that there’s not an endless supply inside that machine. Explain limits of your checking account. Take your cash and head to the garage sales and when you’re out of money for the day, you’re out.
Paper money is also good for allowances of course. In some cases I’ve seen a switch in rewards for kids. Say a kid does an extra chore, I’ve seen parents offer a toy up as the reward. However, I think parents who do this may be missing a key teaching opportunity. If a child is given money they’ll have to count is out, see if they have enough for a toy, and make decisions about buying it or not. A toy vs. money is not as concrete a way to teach finances to a child.
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- Teach kids about budgeting
How do you teach your child about money? What’s worked best for you?
[image via stock.xchng]
