How to teach your Child about Money
Globally, we are becoming progressively more reliant on non-physical forms of money. Over the past two decades, there has been a steady movement towards a cashless society, with the impact of the coronavirus speeding this process up considerably. With the need to keep contact to a minimum, it became the norm to tap the bank card on the card reader as opposed to typing in a pin number. Further, in a society where time is precious and people’s lives have become seemingly busier, we have become more reliant on the convenience of online shopping. There is limited interaction between the customer and the seller and therefore, how we spend our money and manage our money is changing considerably. With this, how we teach our children about money management need to take into consideration all these technological changes. Although understanding the fundamentals such as coin value is important, the need to prepare our children for these changes within the financial world has never been more important.
What about Virtual Currencies?
Virtual currency is a type of digital currency which is unregulated. It is not issued or controlled by a central bank and examples of such currency include Bitcoin, Litecoin, and Dogecoin. Over recent years, they have gained traction amongst investors, with people transferring their capital into these new currencies, in the hope of exponential rises leading to significant returns. They run in a similar way to the stock exchange, they are notoriously volatile and should be entered into cautiously. Although these virtual currencies are not widely discussed with children, there is an increasing presence on social media, with advertising campaigns being seen on platforms such as Youtube suggesting that money can be made through investments. Having a basic understanding of these currencies and how they work, as well as an understanding of the risk that is associated with these types of currencies, is important, should your child approach you about these currencies. Discussions should be open, but they should err on the side of caution.
How to learn about modern-day money through play
In line with the new modern-day approach to cashless transactions, the Chip n Pin Till is a great way to begin to learn how to shop, in a safe environment through play. Unlike other shopping role-play toys, the Chip and Pin Till offers the opportunity to engage in a learning activity that directly relates to a more modern-day approach to shopping. Coming fully equipped with a card reader, receipts, a working calculator, bank notes & coins as well as an array of play foods, this is the ideal starting point for anyone wanting to offer a realistic opportunity for learning about cashless shopping.
Designed for children aged between the ages of three and eight years, this role play set allows you to talk about traditional money spending, through the use of banknotes and coins. However, the chip and pin machine elevates the experience for all involved to a new level.
Take it in turns to be the shopkeeper and show the children how to use the card reader and type in a pin. Encourage them to do this themselves and to think of a four-digit number that they have to try and remember. Play the game over several days and see whether they remember their pin number from one day to the next. Turn it into a game where if they forget their pin, they can’t purchase the items from your shop. Of course, remember to do this in a fun and light-hearted way! By making this activity fun and encouraging, it begins to instil in the child the importance of the pin number and how remembering this is key for making purchases.
It is important to remember as part of this, that practicing and developing a child’s social skills, are still really important. With the movement to online shopping, gaining experience of the social interaction of face-to-face transactions is even more important. Encourage your child to ask the cost of an item and ask whether certain items are in stock. Remind your child about the importance of being polite and courteous and encourage this in their interactions.
Learning how to budget without physical money
Learning about budgeting can be tricky. If you have a £20 note and you spend £8, then you will have £12 left in your hand. You can physically see it. One of the challenges of teaching good financial management to a child in a cashless world is it is difficult to keep track of how much has been spent and how much is left in a bank account. Often it is hard to relate the numbers on the screen to real, physical money. With the increasing use of credit cards and loans, teaching debt management from a young age is key. The little shopper playing cash can help with this. This is a full set of play money and can be combined with other shop toys such as the Chip n Pin Till.
Encourage role play where the supporting adult pretends to be a bank manager and shows how the physical money leaves the account every time the child uses their bank card. Give the child a budget of £20 and if the child is pretending to buy items from a role play shop, after each transaction, always pull the activity back to the bank manager. Ask them how much they spent, show them the physical money leaving their £20 budget and help them to work out how much they have left. If they spent too much and don’t have enough money left, then ‘decline’ the payment. As cruel as that may seem, it delivers the message that tapping the chip and pin machine with their card, has real-time consequences to the balance of their accounts and helps to deliver the message that budgeting is key in order to have good money management skills.
Talking about money may not be fun, but it is essential for a healthy long-term relationship with it. With role-play at the very heart of the development of these skills, you can adapt and develop your games easily to help learn the fundamentals of money management within a cashless society. The only limit is your imagination.