The past two articles were about giving our kids allowance or how to give our kids allowance. In this article, I intend to close our allowance series by discussing allowance management — both for kids and parents! One question that this post aims to answer is: Do I use technology to teach my kids about money?
Go Analog or Go Digital?
The ever-growing digital space surrounds us every day, including banking and shopping. And as such, it is also extending to day-to-day financial parenting! In-app stores, we already see parenting-related apps that support maintaining a household and managing kids’ chores.
With this in mind, I’m sure a lot of you are wondering how you can incorporate apps and other digital tools into your parenting routine. Here’s my take on it, especially when it comes to dealing with money.
For younger kids, go analog
Digital is very abstract.
And what we’re seeing is that growing number of monies are transacted over digital channels or online banking. So by definition, they never actually pass through your hands. This means that it is difficult to engage the children in these money moments nor use them as learning opportunities. For kids who still do not have a good grasp of abstract concepts, it may be difficult to appreciate the relevance of a digital money transaction. Kids will not be able to grasp the value of money if they do not experience it.
They need to go through the actual motions of receiving money and giving away money. You can use apps and technology to help kids with their chore assignments and progress. But, while your kids are still young, you have to make money decisions practical and concrete for them.
For older kids, go digital
Online banking and digital currencies are becoming more and more common. With that in mind, you also need to make sure that your kids become more and more aware of money in its different forms
Once you’ve already established good money habits with paper money and coins, you can begin to teach kids about digital money. With this understanding, you can make careful use of apps that automatically debit money to your/their account.
Maybe the most simple but important rule is that a child should learn to always ask for permission to spend money in an app — without exceptions. Spending digital money freely should not be a mistake children are allowed to make. While we must trust our kids and let them commit mistakes, it’s better to learn that money is wasted if you buy something of poor quality that you end up throwing – rather than enrage their parents with a huge online spend.
The Pros and Cons of Digital
I wanted to dedicate a section to discussing the pros and cons of digital because of two things:
One is because we can no longer shield our children from a reality that is already an integral part of our everyday lives.
Second (in relation to my first point above) is that managing a child’s exposure to digital devices has become a big challenge of parenting. With that, good digital financial parenting becomes imperative. Children need a healthy balance of digital and physical interactions to develop social skills. Which means that they also need a healthy balance of digital and analogue money interactions to develop healthy money attitudes later on in adult life. Parting with money, physically giving it away, is a very different experience than swiping it away. Realizing it is gone for good is an important lesson. And just parting with something digital which you never really held in your hand in the first place, does not impart quite the same sense of accountability.
Sometimes, good old fashioned sayings such as “take care of the pennies and the pounds will take care of themselves” really resonate with me in this digital age. There’s something to be said about physically counting coins.
I understand that taking things digital makes it more convenient for us to look after finances and other matters. But we have to be mindful of the limited cognitive capacity of younger kids’ brains.
Match Your Practice With Your Children’s Cognitive Development Stage
As parents, it’s our responsibility to make sure that the education and training we are giving is age-appropriate. There is no point in educating kids if they cannot understand what we want to teach. We can use technology to teach kids about money but we have to make it appropriate for their age and cognition.
Developmental psychologists have long studied how children’s brain works and how it’s moulded. Jean Piaget theorised that children’s brains aren’t simply that of a small adult’s. Human beings go through phases and levels of cognitive development. It’s a sequence that a child goes through — from developing sensory perceptions to motor activities to abstract reasoning and thinking.
At the end of the day, we want to make sure that our kids get the most learning out of everything. However, let’s let our children be children. We want them to enjoy their childhood despite the important lessons we try to teach them.