I was reading recently that a high proportion of university students have little or no financial literacy. And by that, I mean the ability to understand how money is made; saved and spent.
This gave me pause for thought and I looked at my own children (7 & 9 yos) and wondered about their understanding of money.
I realised that because we tap and go mostly (Australia is ranked 6th in the world’s top ten cashless economies – Squareup) their exposure to cash is actually quite limited and as a result, this must hinder their grasp of basic cash management. Because if you only see your parent tapping a card to pay for something, then how easy is it to draw the connection between the dollars you have and what’s left?
A dad at school asked if anyone used the prepaid credit cards for their children as a way of handing over the pocket money. The response was varied. My initial reaction was “don’t do it”! I felt that giving them a card doesn’t promote the tangibility of money nor does it promote understanding. Credit card debt is a massive issue for many people.
We give our children pocket money. In cash. This prompts them to count it; possibly save it; and maybe even sometimes, when in Target, not spend it straight away when they see what the latest Beyblade costs . It makes them stop and think. And do arithmetic. And for me that’s a parenting win because I believe that they are starting to see the immediate link between earning money and spending it