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Helping your kids understand digital money

Helping your kids understand digital money

As we use cash less and less, the conversations we have with our children about how money works need to change. Here are a couple of worthwhile tips you can share.

Chat to them at the ATM

A recent survey conducted by CommBank found 40% of five year olds think that ATMs hand out free money, and 33% of five year olds think someone is behind the wall of the ATM passing money out.

While this might be an exciting world to live in, we’re all aware that this isn’t the case. ATMs hand out money that you work very hard to earn. If your child has a piggy bank, you can explain that the ATM is like a piggy bank where your savings are stored. Each time you take money out it means there is less money left in your piggy bank. It’s the same when you buy things with your debit or credit cards.

Explain that online doesn’t mean free

When all it takes is the press of a button, it can be easy to feel that online purchases don’t cost a thing. The survey found 61% of six year olds believe you don’t need to pay money to watch movies on a tablet or smartphone.

Before making any purchases online, sit down and explain that this money will be taken out of your bank account. If you’re buying something for them like a game on your iPad or smartphone, you could take the cost of the item from their pocket money. This will help them see the real cost when shopping online and they might consider whether they really want to make the purchase if it means giving up something else they were saving for.

Open an account for your child that they can see online

One of the best ways to learn is to do it yourself. If you set your kids up with a bank account they can access online it will give them a better understanding of how digital money works. Once they’re set up they can also use the CommBank app to view their balance, nickname their account and pay someone. 

To take the lesson one step further, if they earn pocket money you may wish to pay part of it straight into their account. That way they can become familiar with seeing their money online as opposed to in cash form. 

It can be hard for children to understand what they can’t see, so hopefully by following the tips above you will be able to shed enough light to overcome this challenge.

Things you should know: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.