Practical tips to brighten your financial future.
A recent column in the New York Times’ Your Money section raises an interesting question: Should you give a child a debit card? While the Times covers the various startups and venture capitalists looking to tap into a huge market of young consumers armed with the desire to buy and the means provided by parents to do so, the real problem to be solved is not so easy. to solve. Before loading a debit card with money for little Finley to spend on Roblox or that $25.99 turtle using the toilet, Consider building good money habits with your kids first.
It has become increasingly clear that, if we were all here to see it, the future will be cashless, but that doesn’t mean kids growing up now shouldn’t know anything about cold, hard, cash. tangible.
Using plastic to pay for things seems easier and smoother than paying with cash, and many studies confirm this. A 2000 study by MIT showed that people were often more willing to pay more money if they used a credit card rather than cash.
Credit or debit cards look like play money – the funds leave your account, but you don’t really see or feel them until you take the extra steps of checking your balance and do the calculations yourself. As adults, we already understand this concept, but children might need a little more help.
A children’s debit card is useful in certain circumstances, and if the card itself has a limit set by the parent, the real risk of overspending is mitigated. But having knowledge about how cash works is helpful in developing good financial habits in the future.—SIR