Kids lose sense of cash

Tap and go culture erodes financial understanding

INVISIBLE cash is making it tougher for children to understand their finances as they have little dealings with tangible money, a new report says.

A majority of parents (66 per cent) concede electronic transactions is a massive barrier for children to grasp the true value of money, alarming new findings in the Financial Planning Association of Australia’s latest report found.

With the surge in “tap and go” payments, internet banking and online shopping, children’s exposure to real money was waning.

The report dubbed Share the dream: research into the invisible money generation, quizzed 1000 Australian parents with children aged between 4 and 18.

It also showed 68 per cent of parents were reluctant to speak to their kids about cash. This could be blamed on parents being stressed out by their own financial situation.

FPAA’s chief executive Dante De Gori said pocket money was critical to helping children understand the importance of cash but there wasn’t a right or wrong amount to give them.

“Without pocket money they are not being exposed to the relationship with money,” he said.

The report found nearly 30 per cent of children received no pocket money at all. It also found 62 per cent of parents believed children today would be financially worse off than themselves.

Reserve Bank of Australia figures showed the number of ATM withdrawals and use of cash had plummeted from 53 million withdrawals in June 2016 to 48.9 million in June 2018.

Tribeca Financial’s chief executive officer Ryan Watson said giving kids pocket money “makes it a lot easier for parents to discuss and teach their kids about money. I don’t believe that the amount of pocket money given is overly important, it could be as small as to $2 to $5,” he said.

“The truly important thing is teach kids about the ‘value’ of money.”

He also urged parents to teach their children that “credit cards are the devil”.

The report also showed 38 per cent of parents admitted to borrowing money from their child’s piggy bank or bank account to pay for urgent expenses.