There is one drawback few people notice with this system. It's the impact it has on our children. There are three concerns here:
- Children don't see monetary transactions and understand the values of coins and bills.
- When they can't observe cash in action, it's too abstract to understand.
- Kids with disabilities who don't have the opportunity to work with money don't develop critical life and job skills.
I work in a junior high school. I also test elementary-aged children from time to time. It is becoming more and more common to see children who don't know the value of coins and can't count change. They don't see bills used, and don't have exposure outside of school. This means their understanding can be lost. This can be a huge deficit when applying for a first job.
My children often asked for things we could not afford. I tried to explain to them the realities of our family budget, and they would often reply, "Then just write a check." I soon realized that they had no comprehension of how checking accounts worked. We had many lessons, and they were given the opportunity to have a checkbook while in high school so they could learn to balance the books and be better prepared for adulthood.
As mentioned above, teens need to know how to make change when applying for their first job. They should also understand this concept so they are not cheated when making purchases. Many opportunities must be provided to practice this important ability.
What can you do? Make small purchases with cash in front of your child. Help them develop a budget and make family finances a subject of regular discussion. Easiest of all, have them count the change in your wallet each night.
How do you teach your children about money?