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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 each of them a $20 bill. Their preschool was holding a canned food drive, so the family walked the aisles together and selected items from the shelves. Simanson told her kids how much each one cost, hoping to help them understand what it means, to buy something with money.
When the kids handed their bills to the cashier, Simanson realized that she’d grown up watching her mom shop this way every single week. But her kids are simply not living in that same reality.
“They never see physical money,” Simanson says. “I’m 31, and when I was growing up that felt like the beginning of the shift from cash to debit cards, and then after I got out of college, it was Venmo." She and her husband have talked about the invisibility of money, and what that means, particularly when it comes to their children.
When Gen-Xers and millennials were coming of age, they saw their parents pay cash and count change at stores. At the bank drive-through, they watched endorsed checks whoosh through the vacuum tube toward the teller waiting at the window. Dropped quarters in the couch cushions or a faded fiver plucked from the laundry basket were thrilling and entirely plausible prizes. Back then, teens were paid in cash when they mowed a neighbor’s lawn or spent an evening babysitting, and their parents weren’t monitoring the movement of every wad of bills shoved in their pockets.
Now those same kids are grown, and figuring out how to guide their own offspring through an increasingly cashless landscape, a fact that is transforming the childhood experience of money — how kids learn about it, how they use it, how they conceptualize it. There is more parental oversight. There are fewer loose coins in car cup holders. The neighborhood kids put up a lemonade stand with a sign displaying a parent’s Venmo account, because most passersby probably don’t have $2 cash on hand.
Parents have to be deliberate as they navigate this new world with their kids, says Jessica Pelletier, a mom of two and the executive director of the financial education nonprofit FitMoney, because children are absorbing what we do from a much earlier age than we might think. Added to the challenge, Pelletier says, is the fact that many of today’s parents didn’t exactly get a top-notch introduction to finance when they were kids themselves.
“When parents today were younger, maybe their parents opened a savings account for them, and maybe they had a piggy bank, and that might be the extent of their personal finance education until they were about 18,” Pelletier says. “Personal finance was ... a ‘throw you in the deep end and figure it out’ kind of education. You’d get your credit card at 18, get that savings account, and have to learn how to use it.”
That’s late in the game, she says. "Research shows that your behaviors and your habits are actually formed at a much earlier age. So your strong desire to be a saver, or your passion for spending, or your risk aversion, that’s really formed inside you by a very young age — in most kids, by the age of 7.”
So what does it mean, then, if many kids aren’t actually seeing money the way their parents once did? Older generations came of age with far more ambient opportunity to witness the movement of money. “There was something you could visualize,” Pelletier says. “So now it’s our job to verbalize it. Because kids are watching — but if they never see any type of transaction, then they think everything is free in the world. Mom clicked ‘buy’ on Amazon, and two days later, we got it.”
Parents have to help kids understand that a gift card or a payment app or even a single tap of the finger can convey the same value as physical money, Pelletier says, which is a complicated lesson to teach, and also an essential one. (Case in point: A 6-year-old in Michigan recently made headlines when he ordered more than $1,000 worth of delivery meals through his dad’s Grubhub account on his phone; the horrified dad suddenly found himself staring at a dwindling bank account while buried in an onslaught of jumbo shrimp and chili cheese fries, and meanwhile his son just wanted to know did the pepperoni pizzas come 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 toward cashlessness.
“Paper money is gross and germy,” says Carleen Haylett, a single mom of an 11-year-old son who immediately hands her the bills tucked inside his birthday cards. She transfers the equivalent to his debit card through Greenlight, a banking app for kids and teens with parental controls.
Her son has never really dealt with cash at all, 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 did make his introduction to money rather abstract, and it wasn’t until about fourth grade that he could grasp the concept of a bank account, she says. “That’s when he started to get it, that ‘I have this bucket of money, and I can spend it now, or I can save some of it for a larger purchase, and I should also be putting a percentage aside to donate to charity.’”
Freya Hurwitz, a mom of two in Massachusetts, set up her kids with bank accounts and Apple Cash when they were 11, and they’ve been almost exclusively digital ever since. Her 15-year-old daughter is happy using a debit card for most things, but it’s not perfect: “The kids can’t pay one another if they all go out to dinner and want to split a bill. There’s no Venmo for kids, you’re not technically supposed to use it unless you’re 18,” Hurwitz says. “Technology hasn’t caught up with the fact that a lot of kids aren’t using cash now, either, and there aren’t payment apps for them to use. There’s a gap there right now.”
Even as debit cards and Apple Pay and kid-centric financing apps steadily take over, there is still both the necessity and appeal of paper money. There are families who are not among the 83 percent of adult Americans who own credit cards. Dollar bills and coins are still a part of math lessons in elementary school curriculums. Many teens still say they prefer cash, which they can spend how they choose, without their parents knowing. And parents — especially parents of younger kids, who might not have debit cards or smartphones yet — often see their kids instinctively gravitate toward currency they can touch.
Even Pelletier says her kids are consistently more thrilled by a $20 bill than a $20 gift card: “Cash is exciting and magical,” she says. “My 12-year-old will save that cash until he absolutely has to use it. He will go through all of the gift cards, all of the e-cards first so that cash can sit in his wallet, because that 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 her troop, they come prepared with apps to receive virtual payments, he says. But the girls are drawn to the zippered pouch stuffed with actual dollars, where the success of their sales translates to palpable heft.
Roadruck was a military kid, and he grew up in a family on a strict budget after his mom decided to leave her job to raise her sons. He’s had stretches when he couldn’t afford health insurance, and he sold his blood plasma for cash in college. He’s since done well for himself as an author and personal coach, and now he wants to make sure his daughter understands more about finance than he ever did as a child. So he talks to her about how money is necessary to make things happen — to pay the bills, to afford groceries. He’s teaching her the value of different coins, which is tricky, because a dime is smaller than a penny but 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 “grandbabies” (interest).
His daughter grasps this as much as an 8-year-old can, that the funds she’s been fortunate to receive exist somewhere in the digital ether yet carry real value, paving the way toward a solid financial future. But she is still most ecstatic when the Tooth Fairy tucks a single crisp bill under her pillow.
Roadruck laughs, because even in a changing culture, kids are still kids. “When they have cash in hand, they’re like, ‘this is real,’” he says. “'This is buying power! I can get candy. I can get gum.'”