I went to our big family Christmas party at my dad’s house on Saturday night. As we were talking after dinner, the conversation turned to finances and parenting. We began to discuss the things we assumed as children, from watching our parents’ behavior.
Alex, my brother-in-law, mentioned that although his family didn’t have very much money, he always thought they had money. Why? Because there was a little plastic card his mom would take out, put into the machine, and cash would come out.
I remember being at the store with my mom as a child. I begged for a toy, and my mom told me that we didn’t have the money to buy it. My response? “You can write a check!”
Now, I don’t think there’s anything wrong with using ATM cards or writing checks. But as parents, we have to make it a point to explain debit cards, credit cards, and checks to our children. From a child’s perspective, debit cards, credit cards, and checks are an endless supply of cash.
You’ve probably heard this commercial on television:
There are some things money can’t buy. For everything else, there’s Mastercard.
At every turn, our children are being told that you don’t actually need money to buy things. And I think that feeling is reinforced when they see their parents whip out a piece of paper or plastic to pay for things at the grocery store. I don’t want my children looking at a little plastic card and thinking it will buy them whatever their little hearts desire.
At the very least, make sure you explain to your children how credit cards, debit cards, and checks work. Explain how the money is put into your bank account, and that you can’t spend more than what you have in the bank. Otherwise you run the risk of desensitizing your children to credit cards, and that could get them into big trouble when they start college.
Have you talked to your children about how debit cards, credit cards, and checks work?
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It’s probably a good idea to include them (in an age appropriate way) in the details of your budget. Actually show them where all the money goes – and that you have to try and think of everything where you might need to spend money.
On the flip side, although I grew up in a somewhat poor family, I thought we were too poor to put 10 cents in the candy vending machine (when the real reason I couldn’t get a candy was because my mom was all into health food). So I guess my parents went a little too far in stressing that we didn’t have money;)
I think I have read an article about tips for teaching your children about money. I wish I remembered where it was because it was very practical advice…
I said the same thing to my mom when I was little! When we got home from the store, she taught me about checkbooks and money. It made sense after that.
I’ve seen commercials for a new version of Monopoly–this time, no cash. Instead, each player has a little card to swipe. I think it’s ridiculous. Monopoly is a great game to play to learn about money and basic math.
Wow,playing a game of monopoly with a card to swipe? Scary stuff!
When I was little we didn’t have debit cards and my grandmother very rarely wrote a cheque, it was cash all the way.Unfortunately any money in which came in would be all gone within a day or two. There was never a written budget.
I also remember when my kids were little saying just use your bank card mom, once I explained to them about how the card is linked to mom and dads account they understood.
@plonkee – We’re going to start doing that when my daughter turns 10 in a couple of months. We’re going to give her a monthly salary and help her budget.
@Heidi – Very good point. It’s important to be truthful with our kids, or they’ll see right through us eventually.
@Kacie – I’ve heard about that version of Monopoly. I think it’s horrible!
@Heather NKUWTJ – It’s nice to know that kids have the ability to understand. And yeah, spending cash all at once is the downside of having cash on hand.
You can’t start young enough when teaching your children about money! We’ve tried to keep our 7 year old involved when dealing with money (like letting her pay the cashier at the diner and count the change after). We opened a sub-account in our ING so she can see how her tooth fairy money is growing. When she sees stuff on TV we explain how expensive these things are to her and that we can’t have all that we see. Time will tell how well it all sinks in with her.
When our kids were really young they thought the ATM was this magical, wonderful machine that gave everyone…”green money” when they needed it.
Which led me to eventually use a sort of big pizza pie type chart that I divided the pieces into all the places our family’s money had to go. I even cut up the pieces so they could pick them up and really feel how big or small each one was.
This combined with actually coming with, as we deposited actual paychecks, inside an actual brick and mortar bank; helped them to understand that the ATM was just giving us back money that was already ours.
There really are a whole lot of complex ideas with the whole banking, cash money, checks, and plastic cards way we handle our personal finances.
Your so right to point this issue out…
I think my girlfriend sees me as a walking piggybank with a plastic card attached as well. I think she just always assumes I can afford everything because I always use credit cards to pay for things effortlessly.
Quite unfortunate
-Raymond
We had a program at my elementary school where a credit union came in once a month and we deposited or withdrew from our accounts. I loved it because the older students acted as tellers. I wish they had more programs like this.
Be like my parents. They explained to me what a credit card was and how not paying it off every month would basically wreck someone financially. Explain interest, and show how great it is when it works for you. Now explain that if it is so good for someone on one side, imagine how horrible it must be to be PAYING that interest.
Growing up, I thought Credit Cards were evil. I use them for everything now, but I am sure to never go near the boogeyman known as Credit Card interest.
I thought that sort of thing as a kid, but my mom got me straightened out pretty early on. :) Then again, I also knew that dad was the one to go to if I wanted money or big things.
You are so right. The ATM is seen as a fountain of money.
We have not yet involved the younger children on money and budget discussions yet, but there is now a lot more talk at the dinner table on the need for care in spending.
I am sure a little is rubbing off on to our children.
I hear your advise and will make a conscious effort to tackle this issue with the kids.
(And I agree, this swipe card Monopoly is really, really negative.)
We’ve actually decided that Shyann (10y.o) will start sitting with us in January when we do our bills. Our kids have a pretty good financial back ground but I had no clue at all growing up other than “don’t you DARE ask for ANYTHING because we’ve got no money right now because we are saving for YOUR college” yeah…
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@Laura – That sounds like a really cool program.
I just bought a book on teaching finances to children. It has a lot of cool activities, and I’m sure I’ll be blogging about some of them in the near future.
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