Commentary: My children have rarely used cash in school – here’s how I ensure they have good money habits

SINGAPORE: My daughters’ school was among the early adopters of the POSB Smart Buddy Programme in Singapore. And when this mode of e-payment was introduced, I must admit I was upset.

To me, using cash was as a valuable way for my children – Primary 1 and Primary 3 then – to understand the concept and value of money.

By this year, most students in Singapore schools will not need cash for their meals and bookshop purchases.

DBS and the Ministry of Education signed an agreement in 2022 to extend the POSB Smart Buddy programme to all primary and secondary schools, junior colleges, and Millennia Institute by 2025. Students will be able to make e-payments using their POSB Smart Buddy cards and watches, as well as other payment methods like the School Smart Card and EZ-Link cards, at tap-and-pay terminals.

This shift to e-payments in schools seems inevitable. We already pay in supermarkets with a tap of our phones, eat at restaurants that only take cashless options, and use PayNow at hawker centres. But is it too soon to implement the same in primary schools?

SPENDING REAL MONEY

As an adult, I appreciate the convenience of e-payments, but I believe that young children’s development would benefit more from the inconvenience of cash.

Before my daughters started primary school, I had prepared them by role-playing grocery shopping at home, using real money to “buy” toy food items. This activity not only taught them simple maths, but also familiarised them with dollar notes and coins. It helped them understand that we use money to pay for things, and the importance of budgeting and planning ahead when purchasing multiple items.

I had hoped this learning would be reinforced in school, but this hope was dashed when their school went cashless.

Digital payments can make the concept of money abstract for children, and there’s a broader implication when procuring items feels too easy. Invisible, intangible digital money has lower value psychologically: Numerous studies show it changes our perceptions of spending, leading us to spend more and give in to impulse buying.

Even adults – the ones feeling the pain of earning our wage – are susceptible to this, let alone children who are still developing self-control.

Being able to buy things with a tap of a card may cause children to lose sight of the fact that they are spending real money.

UNFAMILIARITY WITH CASH

There’s something about holding dollar notes and coins and observing them depleting in their wallets that helps children more easily understand that money is finite and highlights the importance of budgeting.

It's evident that dollar notes and coins are unfamiliar to children these days.

When I play supermarket check-out with my preschooler nephew, he always prefers using a fake credit card over tokens that resemble coins. He delights in tapping the card on the cash register while making a "beep" sound.

In school, it's common to see children handing notes to stallholders, then expecting the correct change without verifying it. A book vendor shared with me that even 10-year-old students mix up the denominations of notes and coins when paying.

When she was in lower primary, my younger daughter struggled with a maths worksheet on money when in lower primary as she was confused by the pictures of coins and dollar notes and how to exchange coins for notes.

Without physical piggybanks to visually track their savings, my children are also less aware of how much they've accumulated from their pocket money and, consequently, less focused on saving. It’s up to my husband and I to use our bank apps to show them their savings progress in their accounts, and honestly, we haven’t been diligently doing so. We’ve yet to find a way for them to independently track their savings, although there might be options we haven’t explored.

FINANCIAL LITERACY WITHOUT CASH

It’s understandable that parents are concerned about the loss of learning opportunities and their child’s financial literacy. However, I offer some consolation from my own experience, where both my daughters have relied on e-payments for most of their primary school education.

Both my girls are now in secondary school and continue to use digital payments predominantly in school. Despite this, they don’t have any problems when they need to use cash, and more importantly, they are not impulsive spenders.

E-payments have definitely brought much convenience. My children appreciate the shorter queues during recess and having just one card to pay for food and transport. As parent, I value not having to remember to put cash in my child’s wallet every day.

Furthermore, digital payments also often come with useful apps that allow parents to track their child’s spending, set spending limits and automatically transfer unused funds to savings accounts.

LESSONS FROM HOME

Children often learn by observing their parents, including our attitudes towards money and spending habits. So, what matters most is what we teach our kids at home, and the values we impart to them in everyday life.

I take time to explain to my children how e-payments like credit cards, debit cards, PayNow and EZ-Link cards work, emphasising the need to have sufficient money in the bank account to ensure our cards can be used, and to avoid debt and late charges.

My children also pick up on my husband and my frugal habits, where we emphasise only buying things when needed, rather than things we simply wanted. We discuss inflation and the value of certain purchases with our girls. This approach has encouraged them to think twice before spending on fancy stationery or fashion items.

By fostering financial literacy through everyday experiences and having open conversations with our children, we can equip them with the skills they need to navigate both the physical and digital worlds of money.

In the end, it’s about instilling values of responsibility, prudence and informed decision-making that will guide them throughout their lives.

Vivian Teo is a freelance writer, children’s book author and owner of a parenting and lifestyle blog.