When the lemonade stand accepts Venmo: what does money mean to kids?

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A few weeks before Christmas, Sarah Hunter Simanson took her 2-year-old son and 4-year-old daughter to the grocery store and gave them each a $20 bill. Their preschool was having a candy drive, so the family walked the aisles together and selected items from the shelves. Simanson told his children how much each cost, hoping to help them understand what it means to buy something with money.

When the children handed over their bills to the cashier, Simanson realized she had grown up watching her mother shop this way every week. But her children just don’t live in that same reality.

“They Never see physical silver,” says Simanson. “I’m 31, and when I was growing up, it felt like the start of the shift from cash to debit cards, and then after I got out of college, it was Venmo.” She and her husband have spoken about the invisibility of money and what it means, especially when it comes to their children.

When Gen-Xers and Millennials came of age, they saw their parents paying cash and counting change in stores. At the bank’s drive-in, they looked at endorsed checks whoosh through the vacuum tube to the cashier waiting at the window. Abandoned coins in the couch cushions or a faded nickel snatched from the laundry basket were exciting and entirely plausible prizes. Back then, teenagers were paid cash when they mowed a neighbor’s lawn or spent an evening babysitting, and their parents didn’t watch the movement of every wad of cash stuffed into their pockets.

Now those same children have grown up and are discovering how to guide their own offspring through an increasingly moneyless landscape, a fact that is transforming the childhood experience of money – how children learn about it, how they use it, how they conceptualize it. There is more parental supervision. There are fewer loose parts in car cup holders. Neighborhood kids set up a lemonade stand with a sign for a parent’s Venmo account, since most passers-by probably don’t have $2 in cash.

Parents need to be deliberate when navigating this new world with their children, says Jessica Pelletier, mother of two and chief executive of financial education nonprofit FitMoney, because children absorb what we do. from a much earlier age than we think. . Adding to the challenge, says Pelletier, is the fact that many parents today didn’t exactly get a great introduction to finance when they were kids themselves.

Need financial advice? Call your mom: Personal finance columnist Michelle Singletary talks to her daughters about their finances

“When parents were younger today, maybe their parents opened a savings account for them, and maybe they had a piggy bank, and maybe that was the extent of their upbringing in personal finance until the age of about 18,” explains Pelletier. “Personal finance was…a kind of education that is about diving into the depths and figuring it out.” You would get your credit card at 18, you would get that savings account, and you had to learn how to use it.

It’s late in the game, she said. “Research shows that your behaviors and habits are actually formed at a much earlier age. So your strong desire to be a saver, or your passion for spending, or your aversion to risk, it’s really formed inside of you at a very young age – in most children, at the age of 7.

So what does it mean, then, if many children are not actually seeing money like their parents once did? Older generations have come of age with a much more ambient opportunity to witness the movement of money. “There was something you could visualize,” says Pelletier. “So now it’s up to us to verbalize it. Because kids are watching – but if they never see any type of transaction, then they think everything in the world is free. Mom clicked “buy” on Amazon, and two days later we had it. »

Parents need to help kids understand that a gift card or payment app or even the tap of a finger can convey the same value as physical money, says Pelletier, which is a complicated lesson to teach, and also essential. (Example: A 6-year-old kid from Michigan recently made headlines when he ordered over $1,000 worth of meal delivery through his dad’s Grubhub account on his phone; the horrified dad suddenly found himself staring at a dwindling bank account as he was buried in an onslaught of jumbo shrimp and chili cheese fries, and meanwhile his son just wanted to know have the pepperoni pizzas arrived yet?).

Despite the potential pitfalls, some parents are happy to move away from the tactile experience of handling money, especially after years of a pandemic that has accelerated society’s pivot towards cashlessness.

“Paper money is gross and germy,” says Carleen Haylett, a single mother of an 11-year-old son who immediately hands her the bills hidden in her birthday cards. She transfers the equivalent to her debit card through Greenlight, a banking application for children and teenagers with parental controls.

Her son has never really dealt with money, she says, and he doesn’t want to. “Most of his money goes to things like in-game purchases on Roblox,” she says. “He’s been digital from the very beginning.”

But that made his introduction to money rather abstract, and it wasn’t until about fourth grade that he was able to grasp the concept of a bank account, she says. “That’s when he started getting it, that ‘I have that money, and I can spend it now, or I can save some of it for a bigger purchase, and I should also set a percentage aside to donate to charity. .'”

Freya Hurwitz, a mother of two in Massachusetts, set up bank and Apple Cash accounts for her kids when she was 11, and they’ve been almost exclusively digital ever since. Her 15-year-old daughter is happy to use a debit card for most things, but it’s not perfect: “The kids can’t afford each other if they’re all going out to dinner and want to split a bill. There’s no Venmo for kids, you’re technically not supposed to use it unless you’re 18,” says Hurwitz. “Technology also hasn’t caught up with the fact that a lot of kids aren’t using cash now, and there are no payment apps to use. There is a gap there right now.

Even as debit cards and Apple Pay and child-centric finance apps gradually take over, there’s still both the need and the lure of paper money. There are families who are not among the 83% of American adults who own credit cards. Dollar bills and coins are still part of math lessons in elementary school curricula. Many teenagers still say they prefer cash, which they can spend however they want, without their parents knowing. And parents – especially parents of young children, who may not yet have debit cards or smartphones – often see their children instinctively gravitating towards the currency they can touch.

Even Pelletier says her kids are always happier with a $20 bill than a $20 gift card: “Cash is exciting and magical,” she says. “My 12 year old son will save this money until he absolutely needs to use it. He will first review all gift cards, all e-cards so the money can stay in his wallet, because it feels special.

When Jeremy Roadruck, a 47-year-old father in Fort Lauderdale, Fla., takes his 8-year-old daughter to the park to sell Girl Scout cookies with his troop, they come prepared with apps to receive virtual payments, he says. But the girls are drawn to the zipper pouch filled with real dollars, where their sales success translates into palpable weight.

Roadruck was a military child and grew up in a family on a strict budget after his mother decided to quit her job to raise her sons. He had times when he couldn’t afford health insurance, and he sold his blood plasma for college money. He’s since done well as an author and personal trainer, and now he wants to make sure his daughter understands finance better than he ever did as a child. So he explains to her that it takes money to get things done – to pay the bills, to buy groceries. He teaches her the value of different coins, which is tricky because a penny is smaller than a dime but is somehow worth 10 cents. He shows her their investment accounts on his computer screen and explains how her money is working for her, making “babies” (dividends) and “grandchildren” (interest).

Her daughter understands this as much as an 8-year-old can, that the funds she was lucky enough to receive exist somewhere in the digital ether but have real value, paving the way for a solid financial future. But she’s even more ecstatic when the Tooth Fairy slips a single crunchy note under her pillow.

Roadruck laughs, because even in a changing culture, kids are still kids. “When they have money in hand, they say to themselves, ‘It’s real,'” he says. “’It’s buying power! I can have sweets. I can get gum.'”

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