When 14-year-old Gabriel Greenbaum got his first electronic cash card, he was ready to get into the financial game. He says, “It's like you're playing an app, once you’re broke you lose.”
Once you’re broke, you lose. That’s how it works, but it’s not a game. It’s the basic rule of finances. Gabriel, like many of today’s kids, are learning the high-tech way.
From debit cards to digital pay apps, direct deposit once they work and perhaps at some point, even cryptocurrency, the latest generation of kids is growing up using less cold-hard cash.
“Cashless kids are the wave of the present and the future. It is here,” says consumer money expert Jayne Pearle. Pearle believes says that today’s kids are the first of the “paperless money generation”, often monitoring savings and spending with a simple swipe or click. But what impacts are digital dollars having on our kids?
Pearle says while there are many benefits to the digital finances, like instant transfer of funds, or the ability to view balances anytime anywhere, there is a potential downside. “I think, especially with younger children, they really don't understand what they can't see and touch.” She says it can be tough to get kids to realize numbers on a screen equate to real money.
In fact, pulling out the plastic put Gabriel $200 in debt. “You don't really know how much money you have,” he says, “unless you're constantly checking your phone or your account.”
Gabriel’s dad says, “The lesson he learned is to just to be on top of that. It's a great lesson.” His dad, who’s also a parenting expert, says technology is here to stay, so he wants both his kids to be savvy in all forms of finance.
Pearle agrees, but says it’s critical to make sure your kids know it’s not only easier to lose track of balances but also extra fees. And, that’s not all. She says, “So I think there's also a greater chance of identity theft when there's no paper trail or, not just a paper trail, when everything is online or in the cloud.”
At this point, Gabriel’s biggest concern is the debt on his card. And, because of that, he’s a little gun-shy about plastic and says, for now, he’s going old school admitting to us, “I’d rather use cash.”