A few years ago our family started using cash as our main method of payment. We still occasionally use our debit card, but I really believe using cash is one of the easiest ways to curb spending.
What I didn’t realize was that my kids were watching me every time I paid for something. The other day my son asked me for something, I told him I didn’t have the money for it, and he replied,
“Just use your debit card mom, then you don’t have to pay for it.”
Credit cards and even debit cards can be confusing to kids. Many of them don’t understand that when you use plastic you are still paying for something.
Kids understand cash. Give a small child a quarter or a dollar and their eyes light up. They understand that cash has buying power. They also understand what it is like lose it. My children have frantically searched our house from top to bottom looking for lost money. When they go to the store with money in their little hands they agonize over purchases trying to decide which toy is worth their money.
When we saved for our Disney vacation last year, I took a large glass jar and put a big picture of Mickey Mouse on the front. When we had spare change we would put it in the jar. When the kids found money they put it in the jar. While we couldn’t save up enough money to pay for our entire trip, it was a reminder to them that we were saving for something and it was real. We took that jar all the way to Florida and used our savings for some special treats at the park like ice cream and souvenirs.
Even though paying with cash might be more inconvenient it is a great way to teach your children about money. I talked with my 3, 5, and 7 year old about cash and credit/ debit cards the other day and this is what they had to say about it.
Sorry for the sound, my 5 year old has a very quiet voice.
It was interesting to me how my kids really grasped what paying with cash means, but debit cards were a mystery. It is important to teach your children about debit cards and credit cards because they are a part of society. But I believe paying with cash helps your children see the impact of purchases and create good habits they can carry through to adulthood.
This post is linking to Frugal Friday and Your Life Your Blog.
Great post! I clearly remember telling my mom she could “just write a check” when she said she couldn’t afford to buy something we wanted. I had no idea!
Great post!
I loved it when your son said a ” dollar was gold!” I agree!
GREAT post! Loved the video. What a great example!
I totally agree. I still have a hard time grasping how credit cards work – I guess that’s why they end up getting the best of most people. It’s great that you are really taking an effort to teach your kids about money because it will really save them (and probably you, in effect) a lot of worry and stress in the future!
Great post! Before getting married I always paid with cash. It really helped me to control and limit my spending. But my husband almost always uses a debit card, so we have to track and watch our spending closely with that. Hopefully when we have kids, we’ll find a way to explain that the debit card does not equal unlimited cash.
Love it! Your kids are so cute (and how financially wiser)!
I can’t listen to the movie as I’ve got sleeping kids nearby, but I can’t wait to hear their thoughts
My boys are 1 and 2 and we almost exclusively use debit cards. We stick to a strict budget in all money-spending matters, but we swipe the card.
My 2 yr olds grasp of “money” at this point is
1) it’s fun to swipe the card or be the one to hand it over to the waiter and
2) coins are made for magic tricks, like disappearing into walls or ears
What a great idea. I often wonder how using my debit card effects the kids. I guess I should start using more cash.. they do love watching their money jar grow!
Thanks for sharing!! I remember my kids saying I could just write a check if I didn’t have any money. Well, they finally figured out, after explaining it a few times, that you have to have money in the bank to be able to write a check. This was pre-debit card days. (I’m telling my age!)
http://grandmabeckyl.blogspot.com
I love this post!
My Boyfriend and I are debit card swipers. He hates change, as do I, but after reading this, I think were going to change some things.
Were going to try this with my Niece and Nephew and our future children.
THANKS!!
We have made our oldest kid very a part of our getting out of debt, and using cash is definitely a good learning tool. It makes money a tangible object and not an abstract idea. I think if more adults used cash, they would have the same object lesson.
I am just now working on this with my little ones, too. We are using more cash than debit card, slowly, and when I stopped at the atm drive-thru the other day my 4yo said, “Did that machine just give you money?!”
Good points here. I should have a talk with my kids, as I bet they have no clue how a checking account or debit card works.
As Hallee (#11) alluded to, debit cards are just too abstract and young children aren’t capable of that kind of abstract thinking.
I primarily use cash because it helps me control my own spending, but I do agree that it helps the kids understand how we are getting the stuff we are buying. We recently started their own give, save, spend envelopes and I think the pile of money in those envelopes is a lot more meaningful to them than a bank account statement with a number on it.
What a great idea! That’s a wonderful, visual way to teach kids about money. I love how you guys saved up for your Disney trip.
I am AWEFUL with money! I have talked to my kids about my issues in hopes that they learn from my mistakes.
My 17yr old DD swears she will never get a credit card. Her past history with money management does not give me much hope. She just started college we will see.
My 12yr old son does NOT get it! He see something he wants and does not understand why I can’t just use my debit card.
My 12yr old DD#2 is my smarter one! She tells me that she will only have a debit card and pay cash for everything. She is the one we all go to when we need money. I hope she stays that way.
This is a great point. Sometimes it is hard for us as adults to understand the concept of a credit card so it makes sense that it would be doubly confusing to littles that it is real money!!
You little ones are darling in the video and we have the same Ikea folding chairs at our counter I think
Thanks for sharing!
Wow, I never realized how using a debit card looked to my own girls. My older 2 have pretty much figured it out, but when I asked “What happens when you use a debit card at the store?” my youngest answered “Well, sometimes you are stealing from them if you don’t have any money.” I was shocked that my 8y.o. daughter thought I ‘steal’, and worse…she must think I that I think it is o.k. to steal if you don’t have any money. I have a couple of new lessons to teach. Thanks
Very interesting. Sounds like your a great mother training your children to be responsible adults.
I have to admit, we don’t pay with cash enough. And we really need to, for the kids sake.
Nell
I just have to comment that your children have amazing blue eyes .. especially the one little girl closest to the camera with brown hair – they are stunning!
Aww, thanks!
What an important reminder in this day and age. That’s one of the (many) reasons I love shopping at my farmer’s market. I try to let my 4-year-old pay as often as I can. I also got those old-fashioned money roll papers from the bank, and we count his change and roll it up, then he makes his own deposit into his “kids’ club” account. I even took pictures for a blog post someday! (Although blogging about kitchen stuff doesn’t lend itself as well to money…want a guest post?)
Katie
Very true!! My kids especially love if they earn the money, then they can actually hand it to the clerk. Great advice!