Remember the satisfying clink of coins landing in your money box? Smelling a $5 note, holding your first $50? Money used to be cash: engraved metal and pretty paper. You could count it, horde or spend it (or gloat about it to your siblings).
When was the last time you paid in cash? Kids growing up today are more likely to see mum wave a plastic card or dad tap on his smartphone.
Consider the lessons you learnt earning pocket money and watching adults pay in cash. You earn money for work, exchange money for things you want, it goes only so far, save it and you'll end up with more buying power. How can parents teach these basic concepts now that children hardly ever see cash?
In a recent survey for ASB Bank in New Zealand, 64 per cent of parents said they were struggling with this issue. Dr Claire Matthews, a banking expert from Massey University in New Zealand, says that despite a growing focus on money education, she's not convinced young people today are significantly more financially literate than earlier generations were. “Given they don't see the cash because we do things digitally, they could potentially be less literate.”
An effective strategy, she says, is simply talking to your children about the money choices you make, she says. At the grocer's, explain that you could buy four pears or one pineapple for the same price, and let them choose. Give them the option of a weekly take-away food night or saving up for one restaurant meal a month. Play “shop” with younger kids and show them how to pay with Lego pieces or another token.
Another useful approach is harnessing technology to teach the meaning of money. Recent research by Westpac Bank suggested school-age children who earn money through chores and use technology to track their savings are more than twice as likely (45 per cent) as those who do neither (18 per cent) to understand the value of money.
Westpac has created the Pay Pig app with which parents can set up chores, time frames, reward amounts and pay days. The children set their money targets, do their chores and watch their savings grow. Since its launch in May 2013, Pay Pig has had more than 14,000 downloads for kids aged four to 16. Westpac subsidiaries Bank of South Australia, St.George Bank and Bank of Melbourne have released similar products – Little Savers, Happy Saver and Flipper Funds respectively.
ASB Bank came up with Clever Kash: a cute yellow elephant “money box” that interacts with an app to display your child's account balance on a screen on its belly. You or your child can swipe virtual coins or notes on a smartphone into Clever Kash.
“We're trying to mix the tangible with the digital,” says James Bergin, ASB chief architect, technology and innovation.
So far, 27,000 customers have expressed interest in Clever Kash, which is still being fine-tuned for general release. “It's really exciting. It tells us we've hit a vein of customer problem and opportunity,” says Bergin.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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