Is it a good idea to give allowance for kids by transferring it to the debit card? How old should the kid be to understand the abstract value of money?
I used cash for allowance for a few years. However, I found it quite inconvenient. So, I decided to shift from cash to debit card for Faustas (9 years old) for 3 reasons: it is much more convenient, it helps him to get ready for future world and it helps him learn new things.
Convenience
Using debit card is much more convenient than handing over the cash. Firstly, if you give 5 euros per week, you always have to have small money. It gets more complicated if you have 2 or 3 (or even more!) kids. Secondly, if you happen not to have small money at the “allowance day”, you might forget whether you gave that money or not. That happened to me all the time.
Now, each Sunday evening I just transfer the agreed amount to the bank account of Faustas in a couple of minutes.
Preparing for the future world
I believe that in the future there will be no cash. Or, if the cash survives, it will be as rare as solar eclipse. There are businesses today that do not accept cash anymore.
If the future world is cashless, it’s a great idea to teach your kids about abstract money as early as possible.
Possibility to learn new things
On the big day when Faustas and I went to the bank and got his first debit card, he was so proud of it! And I was happy too, as on our way back home I got a lot of questions related to it:
- Can I have two cards and have a limited amount of money in one, so that I do not overspend? Great opportunity to talk about needs and wants!
- What do these three numbers on the back of the card mean? You could talk about the risks related to bank cards now.
- How can I check how much money I have in my debit card? It’s time to talk about the bank and e-banking services!
- What happens if I lose the bank card? That’s one of the ways to teach more responsibility to your kid!
- Can I change the PIN code? How long is the PIN code? Opportunity to talk about PIN codes and why they are needed.
- Where is the closest ATM machine? You could take this opportunity to go to the bank and explain what it does.
He also forced me to transfer allowance which I owed him for the last two weeks immediately when we came back. He kept reminding that until I finally did that. He also asked me to show how to transfer money from my bank account to his bank account. So, I am sure he learned quite a few things that day.
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