More and more, cards are taking the place of cash in everyday transactions. Here are tips to help you adapt the conversation so your preschooler, preteen, or teenager gains money skills from the conversation that can help them later.
Paying with a card is convenient, but it can be mysterious to your kids. When children don’t see you hand over cash, it’s easy for them to misunderstand what you’re getting and what you’re paying. This is true for online purchases too.
Some topics may be sensitive for your family. Keep in mind children absorb much more than the words you say – they’re aware of your moods and attitudes too. Start a conversation when you sense it can be productive and comfortable.
For young children – ages 3-5
Below are ideas for how to approach a conversation. For young children, conversations don’t always need to be about dollars and cents – instead, you can help them build the self-control, planning, and problem-solving skills they’ll need as adults. You can also try to work into the conversation other skills your young child can work on, like practicing counting, waiting for what they want, thinking flexibly, and staying focused.
Thinking out loud
When you buy something with a card, try thinking out loud. You could say something like, “It’s more convenient for me to use my credit card instead of paying in cash, so I’m giving the store my card. They tell the card company how much I’m spending, and later the card company sends me a bill and I pay that at the end of the month.”
Practicing math
Help your child think about the math involved. If your child already understands money and counting, ask how you might pay the amount in cash instead – how many dollar bills, how many quarters, dimes, nickels, and pennies.
For school-age children to preteens – ages 6-12
Below are ideas for how to approach a conversation. At this age, your child can build habits, values, and rules of thumb to support future financial well-being. You can try to work into the conversation other ideas that are appropriate for your preteen, like how to help them fit their experiences into the world around them, establish a system of values, resist peer pressure, and build automatic habits.
Borrowing
Explain that credit cards can be a convenient way people borrow money for the things they buy, and the loan has to be repaid – with interest added if it’s not all repaid right away.
Understanding advertisements
Discuss advertisements you see – in the mail, in stores, on television, or online – and any special offers. Think about how those special offers work and how you decide if you’re interested or not.
For teenagers and young adults – ages 13+
Below are ideas for how to approach a conversation. You can also try to work into the conversation other ways your teenager can practice money skills, like doing their own research, comparison, and decision making.
Comparison shopping
Help teenagers practice managing credit card responsibilities by listing out all the possible costs of a card: fees, interest charges, penalties, and other costs. Then, list the benefits: tracking, spending, convenience, security, rewards, and anything else you consider important.
Spending and budgeting habits
Talk about how to stay in control of spending when you have credit cards. Maybe you have a rule of thumb like “pay cash for anything under $20” or “never pay bills on a credit card.” Try this Rules to Live By worksheet to think about other ways to manage spending on credit.