Pocket money faces a coin toss
PARENTS are being urged to pay pocket money in digital form as old-style cash faces extinction.
Although some advisers still recommend teaching children money skills using dollars and cents, there’s a strong chance that today’s primary school students will rarely – if ever – transact with cash.
Many of their most common purchases – such as snacks at school, music and video games – are bought online, and the trend has sprouted a new breed of digital pocket money options.
Claire Morris, co-founder of online gift card marketplace Prezzee, said digital pocket money made it easier for parents to monitor spending and saving.
“Cash is harder to keep your eye on,” she said.
“Giving kids the skills to save and understand how money works in a digital sense is really important.”
Ms Morris said her children were paid pocket money with digital gift cards in a secure e-wallet, which gave them an incentive to save for more meaningful goals.
“They have their own ideas of what’s important to them, and it teaches them long-term saving,” she said.
Financial technology and education business Spriggy’s co-founder, Mario Hasanakos, said digital pocket money should start as soon as possible.
“As more and more of what kids want to consume is online, the more important it is to have pocket money paid to match it in a digital way,” he said.
“Kids are making in-app purchases on their tablet games at five years old.”
Mr Hasanakos said parents who paid pocket money in cash often found children saw online purchases as separate to pocket money and tried to convince mum and dad that their digital spending didn’t count.
Spriggy, an app and prepaid debit card for children as young as eight, aims to change the way children are taught about the value of money while giving parents insight into their children’s habits. “It’s learning by experience – the families that have the best success give them supervised responsibility early,” Mr Hasanakos said.
Rachael Ben, 35, said sons Rory and Noah had been using the app for about a year and it had changed their behaviour .
“Rory would not keep money in his pocket – it had to be spent,” she said. “Now he has five savings goals set up.”
Ms Ben said digital money skills should be taught alongside broader financial lessons.
“Cash, especially with younger children, burns a hole in their pocket,” she said.