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How to teach children about cash vs digital money

How to teach children about coins, notes and online banking

It’s understandable that, in this cashless society, children may think things are free.

They watch us buy things with the tap of a card, shop online, download music and movies, often without any notes or coins exchanged. Helping children make the connection between cash and ‘invisible’ or online money and how they work is a challenge many parents face.

The first step is to demonstrate that non-cash transactions carry the same economic consequences as cash ones. So whether it’s paid for by cash taken from a wallet or digitally, it still involves ‘real’ money. Here are some things you can do that might help them understand: 

Pocket money

Consider paying pocket money as a mix of cash and an online transfer. That way children can make the link between coins, notes and online money.

Online and mobile banking

Open a bank account for your child and pay part, or all, of their pocket money into it. As they get older, show them how to check how much money is in their account.

Your child can see how much is in their Youthsaver account and Smart Access Account for Youth in the CommBank Youth app.

Saving and smart spending

Start encouraging your child to check their balance every time money is paid into their account. It helps them make the connection between being paid and their overall balance increasing, and encourages good habits. Likewise when they withdraw spending money. Seeing their balance decrease could be the starting point for a conversation about spending ‘needs’ versus ‘wants’ and the implications to their savings whenever they take money out of their account.

Online and mobile shopping

Explain how you buy items online, including music or app purchases, and how it works when you ‘tap’ and pay for something when out and about. Showing children the consequences of clicking ‘pay’ when you’re buying something online will help them link it back to what’s happening to their bank account.

Using ATMs

Show children how to check how much they’ve got in their account, and how to deposit and withdraw cash when you’re next at an ATM. It’s also a good idea to demonstrate what happens to the account balance once you’ve withdrawn or credited money into the account.

Cards

Depending on how quickly your child has grasped digital banking, you may want to introduce them to the concept of pre-paid and debit cards. Start by focusing on the card ‘holding’ money, like a wallet holds coins and notes. Remember to re-enforce the importance of being a smart spender.


Explaining digital money is crucial to setting your child up for future financial success. And it’s never too young to start.

The advice on this website has been prepared without considering your objectives, financial situation or needs. Before acting on this advice, please consider its appropriateness to your circumstances.