4 top tips for educating kids about money in a digital world

How and when to teach kids about money is a popular parenting dilemma. There’s a lot to consider, from finding ways to get kids engaging with money to knowing how to approach the digital side of cashless banking. Here are 4 top tips for teaching your kids about money in a digital world.

1. Teach the concept of earning

Kids can sometimes become accustomed to money coming seemingly from nowhere, especially in the absence of cash transactions. As physical cash becomes less and less commonplace in everyday life, it pays to use experiential learning techniques to help them connect to the concept of earning money.

While directly paying your kids for chores and homework has its pros and cons, finding ways to emulate the reality of income in return for assigned tasks can help set your kids up for a financially savvy future. Bendigo Bank team member, Josh, explains that he’s working on dispelling the myth that it just comes from a ‘magic card’ by helping his daughters grasp the concept of earning their pocket money.

Prepaid debit cards designed specifically for kids can help your children get familiar with the idea of earning an income, by seeing which tasks earned each amount they receive.

2. Use real life experiences

One of the greatest challenges when it comes to teaching kids financial literacy is getting them to relate to the concept of money management. When kids don’t have their own independent responsibilities, the idea of money can get a bit lost in translation. While they might intellectually understand what you’re telling them, they don’t fully absorb what that means until they’ve experienced it themselves.

Teaching through role play in real life scenarios can help break down this barrier. Bendigo Bank team member, Imogen, explains how she uses imaginative play to teach her kids about money. “We set up a pretend supermarket at home with paper money, a cash register and pretend bank cards. This way we can tangibly show how physical money holds as much value as money on a bank card,” she explains, adding that they’re starting to grasp the concept of exchanging money for goods and services.

3. Give kids agency over their money

A question many parents ask is whether or not they should have a say in how their kids spend their pocket money. Bendigo Bank State Manager, Gavin Holden, believes in the value of providing considered independence when it comes to teaching kids about money.

“When it’s discretionary, there are lessons to be learned. A little bit of freedom goes a long way,” he says. Plus, digital banking allows greater visibility over kids’ transactions. This can ensure freedom exists within the boundaries of safety and security, by enabling safeguards like merchant restrictions.

4. Focus on cash flow and savings

A commonly overlooked aspect of teaching kids about money is the concept of cash flow. Teaching children about the principles of saving, like moving a surplus of income from one week to another, can help set them up for the real-life applications of money as an adult.

The visibility of digital banking helps to facilitate the savings conversation, too. Showing your kids that they can move any leftover spending money into a separate savings account to use again in the future helps them absorb the concept of delayed gratification and saving up for bigger purchases.

For more tips about family finance and tips for teaching your kids about money listen to the ‘Make It Count’ podcast with Two Peas, presented by Bendigo Bank.