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Teaching Kids About Cashless & Online Finances

Teaching Kids About Cashless & Online Finances

September 01, 2021

In an increasingly digital world, your kids will need to know how to handle their finances online and how to responsibly use debit cards.

Start teaching with cash

More and more consumers use cards and mobile devices to conduct everyday financial transactions. Start lessons with real money and work into the online world. By the time kids are five years old, they can have an allowance and you should open a joint savings account. Kids should learn to make change, so pay allowances in cash.

Your child’s savings account

Explain that banks hold both real and virtual money. The money your kids deposit will allow them to save for things they can buy, with your permission. Once the account is established, go online and let the kids see their deposits. This will help them make the connection between the real money they deposited and the balances they see online.

ATMs and spending

By age seven, kids are ready to understand electronic spending. Set up a checking account and debit card and allow your kids to use their money. After the account is established (jointly with you and your child), go online together to see their money in their accounts.

Take them to an ATM and help them withdraw money. It’s a great time to explain the fees that may be involved. Also, explain that each debit card has a PIN that allows someone to deposit and withdraw money from his or her specific account. Your children should memorize their PINs when they get older and never share their numbers.

Next, go online to show the kids how each withdrawal and fee were subtracted from the checking account balance. Encourage your kids to check the math to make sure it’s correct.

Explain debit card purchases

The idea of making purchases with a debit card can be introduced when your child is in middle school. Make clear that a debit card may look like a credit card, but money must be in your account to use it. In fact, you can only use your money; you can’t borrow any that you don’t have. Explain that a debit card serves as a way to buy things instead of using cash.

Preparing the next generation

We live in a digital world, and it’s our job as parents and grandparents to prepare the next generation. Remember, money involves teaching your values and life skills—nothing more, nothing less.


The content of this material was provided to you by Lincoln Financial Advisors for its representatives and their clients. This article may be picked up by other publications under financial professional’s bylines.

Curtis Krietzberg and David Krietzberg are registered representatives of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. It is not our position to offer legal or tax advice. Krietzberg Wealth Management is not an affiliate of Lincoln Financial Advisors.