Raising money-smart kids in a (mostly) cashless world

Teaching kids about money has always been important, but today, it’s a little trickier since they see us pay for things with just a swipe or a tap. As parents, we can give our children a strong foundation in money management and help them build a healthy emotional relationship with money, too. Our aim: Less fear, envy, and stress and more confidence, security, patience, and empathy.

Below are a few ways to get started. The biggest benefit? Giving kids opportunities to make financial decisions—within safe boundaries—while you're nearby to cheer them on, help them learn from mistakes, and guide their growth. The heartbreak of losing $20 now might just keep them from losing $2,000 later.

Start with coins and dollars: Seeing is believing

Will your kids use physical cash as adults? Probably not, but it’s still a great way to teach the basics to younger children. Compare handing $20 to a cashier to clicking a Buy Now button—two very different experiences, right? Through dollars and coins, they can learn that cash is visible, tangible, and finite.

• Ages 2-5: Teach the names of coins and bills—pennies, nickels, dollars, and so on. Then play pretend store so they practice these new words at checkout.

• Ages 4-6: Add simple prices to your pretend store so they start to understand that money eventually runs out. This is also a good age to introduce the three-jar method of Spending, Saving, and Giving.

• Ages 6-9: Teach your child how to make change and start talking about wants vs. needs. Have them manage a set amount of money for a day or week, then discuss how it went and what they might do differently next time.

Ease into digital: Safe steps into the real world

Once they understand the basics, you can start to introduce digital money. Maybe not all the way to cryptocurrency just yet. Let’s take a few (hundred) smaller, kid-friendly steps first.

• Watch money videos together. 
  Look to trusted sources, like PBS Kids (for younger kids) or Khan Academy (for teens).

• Give them gift cards or prepaid cards. 
  It’s a low-risk, hands-on experience, sort of like training wheels for budgeting.

• Try kid-friendly money apps. 
  Use apps to track savings goals, create spending categories, or set up virtual jars for spending, saving, and giving.

• Practice buying stocks together.
  Older kids can learn how the stock market works—no money required—with such tools as the Investopedia Stock Market Simulator and MarketWatch Virtual Stock Exchange.

• Open a Flagstar account.
  Look at transactions together and celebrate the joy of earning interest.

Bring them into everyday decisions

Your child is already watching how you handle money—so why not bring them into the conversation? As you shop, save, and give, let them know what you’re thinking.

• Narrate your online shopping.
  Is this website safe? Are the product reviews good? Is there a better deal elsewhere or promo code you can use?

• Teach delayed gratification.
  With your child, add everything you want to a shopping cart, then wait. After a few days, go back to the cart together and ask questions like: Do we still want everything? Can we pay for it? Would it be smarter to save the money for a larger goal?

• Let them make low-stakes decisions.
  Give them $20 to plan snacks for a family movie night. Popcorn or candy—but not both? What about drinks?