In our increasingly cashless society there is a distinct danger that children will grow up without understanding the value and worth on money. It was recently reported that 81% of business transactions are now completed online or by card. Only 19% of transactions involve hard currency. With coins and notes disappearing from purses and wallets, the value of money is becoming abstract and without real meaning.
Writing in the Sunday Territorian (August 19 2018) Sophie Elsworth warned that children are losing ‘the sense of cash’. Our card focussed culture is eroding their understanding of money and finances.
Elseworth’s column cites a recent Financial Planning Association report. “The report … quizzed 1000 Australian parents with children aged between 4 and 18. … A majority of parents (66%) concede electronic transactions are a massive barrier for children grasping the true value of money. It … showed 68% of parents were reluctant to speak to their kids about cash.”
Parents have an important part to play in helping their children overcome ignorance about money. The article suggests that giving children pocket money “… makes it a lot easier for parents to discuss and teach their kids about money. … The truly important thing is to teach kids about the ‘value’ of money.”
Giving children pocket money and encouraging them to save some of it, initially in money boxes and then by banking into a savings account can help. With that should come conversations about the reason for saving. There is a paradox to parental responsibility in this matter. Elseworth wrote the FPA report “ … showed 38% of parents admitted to borrowing money from their child’s piggy bank or bank account to pay for urgent expenses.” That does not set a good example on money management.
Although children should have been introduced to money at home, schools have a part to play in extending their awareness about the value of money.
Educators often state that children learn best when their initial experiences involve the use of concrete objects.Their understanding is reinforced if they can use and handle the materials being discussed. The Australian Curriculum requires that “ … students learn about the nature … and value of money.” (ACARA Mathematics overview). Children start with simple experiences which include them handling money and understanding it in a very basic way. More complex matters are presented as students move up the grades through their schooling years.
Elseworth advises of caution offered to parents (and teachers) by Tribeca Financials Chief Executive Officer Ryan Watson. He urged that young people be taught that “credit cards are the devil”. This may be a little extreme but cards need to be managed carefully and sensibly.