Teaching kids about money used to be a simple thing to do - give them a piggy bank and some coins to get them started or perhaps open up a savings account so they’ve got something for the future and understand how to budget, and that was it. However, today we’re moving towards a cashless society and payments tend to be invisible and digital, which makes it far easier to go over budget and to get into financial difficulty because you literally didn’t see the mistakes you were making, and helping children understand the value of money when they can’t see or touch it can be hard.
Hard, yes, but not impossible, and there are some useful and creative ways you can teach kids about money in a digital world, so keep reading to find out more.
Start With Real-World Scenarios
Even in a digital world, kids still come across physical money occasionally, so it’s not a bad idea to start with some real-world experiences they’ll be able to understand and relate to - it could be that they want to save for a toy they want or they need to count change at a shop, or perhaps they can add up the weekly shop as you go around the supermarket.
There are actually lots of moments in everyday life where you can turn the situation into a (hidden) lesson about how to handle money, and help them understand about budgeting and making purchasing decisions. For example, if they’ve for a set amount of money to spend, you can show them how to prioritise what they really want compared to impulse buys, and that’s a massively important lesson for the future.
Introduce Digital Money Early
Once they’ve grasped the basics, you’ll need to move on to talking about digital money early on, otherwise they’ll get used to cash and then it can get confusing. One good way to go about that is to show them how to shop online and explain how to use a debit card to make a purchase from an eCommerce store. You can even take it a step further and, once they’re old enough, show them how to spot a good online shop that uses a payments API and has good security compared to a bad one that doesn’t, ensuring they’re a bit more savvy when it comes to online safety in the future.
Online banking is another tool you can use to teach your children about digital money - it can start with you showing them how it works in general (perhaps show them your bank balance, then make a purchase by tapping your card or buying something online and then showing them how the money has gone from your bank and what’s left) and then you can set up a bank account for them when they’re older. In most cases, your bank will let you set up a kids’ account that you can control, and when they get to a certain age, it can be separated. Ideally they’ll have a good grasp of how to use digital money wisely by then.
Use Apps Designed For Kids
There’s an app for everything these days, and that includes ones that can help teach kids about money. If you’re not quite ready to give your child their own bank account (or they’re too young for one because there are age requirements in most cases), these apps will be a good starting point. They’ll often come with a card that can be loaded with money to be used in stores or online, and the app tracks where the money is spent so your child can understand their budget and how to spend carefully.
These apps are great because they essentially mimic banking but they do it in a way that younger children can quickly understand, and it gives them hands-on experience with managing digital money, but in a way that means they can’t get into financial difficulties - it’s just not possible because of the way the program is set up.
Make Money Lessons A Game
Kids love games, and using games to teach them important life lessons is an excellent idea because they’ll be more interested in listening and they’ll pick up the details you’re sharing much more quickly. Most of the time, they won’t actually realise they’re learning at all, but the facts and information will sink in anyway, and they’ll automatically use them when they’re in the real-world.
You can turn money lessons into games quite easily, and you might even already be doing it - you could create a pretend shop where they can buy bits and pieces and go through the process like they would in a real shop, for example, or perhaps you could play something like Monopoly with older children as it’s a good way to teach them about rent and consequences of financial decisions and so on. You know your child and what they’re interested in, so you should be able to come up with a game that suits them perfectly and teaches them what they need to know.
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