Ditch the Money jar: today’s pocket Cash lessons are Electronic

Megan Hogg’s four children receive all of their pocket money on the internet and spend it with prepaid debit cards. Hogg did out with her preceding strategy  — a mixture of jars, coins and spreadsheets —  at summer vacations over one year ago.  

“It had been quite painstaking and occasionally if I lost track they’d have two weeks due,” Hogg says.

Megan Hogg's four children --
 (from left) Danika Klinkenberg, Harrison Klinkenberg, Emily Hogg and Nicola Hogg -- are ... Megan Hogg’s four children — (from left) Danika Klinkenberg, ” Harrison Klinkenberg, Emily Hogg and Nicola Hogg — have been paid their pocket cash via an app.   Photo: Janie Barrett

She uses Spriggy, an app supplying a digital alternative to pocket cash. She transfers   pocket cash into the children’s prepaid Visa PayWave debit cards, which they can handle throughout the program. It has been a time saver for Hogg, that works part time as a nurse and spends much of her time outdoors work taking her children  Emily, 15, Harrison, 14, Nicola, 13, and Danika, 11 — to extracurricular activities like play, dance, netball, baseball and youth staff.

Pocket cash has always raised concerns for kids, from just how much children should receive to if it should be determined by chores.   Parents have been divided,  however a 2016 poll by the Teachers Mutual Bank found nearly nine out of 10 respondents thought children should be paid some kind of allowance.

Digital pocket cash remains a radical idea. Pocket cash has retained its strong affiliation with physical coins and notes over most things in our increasingly cashless society. More than three out of four parents   give pocket cash in the kind of money, as demonstrated by a PureProfile poll  of 1000 parents of children   aged eight to 17, commissioned by Spriggy.

Dianne Charman, creator of the Jade Kids Foundation and Money Savvy Kids, which both aim to teach children better financial literacy, believes digital pocket cash apps   might be a useful tool for parents to help their children learn about how to use cash, but parents shouldn’t allow the program to replace lessons with their children. “I believe  Spriggy  alone is fairly forgettable, but Spriggy  with a conversation about what’s occurring is monetary magical.”

She also believes parents should teach their children about money, like by allowing them to deposit money into a bank account and watch as parents withdraw cash from an ATM. She also indicates that if a child reaches their savings goal, parents should withdraw the cash for the goal in money and let the child purchase the thing with that. “Let them count the money out,” she says, ” and then it is possible to show them with the convenience of performing it with a card, but first show them what’s actually occurring.”

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An instructional instrument

Beyond the custom of this  piggybank, lots of parents baulk at the idea of giving their children a tap-and-go card.   There’s lots of research suggesting it is simpler to spend more money when using a payment card than money — and that is for adults that can understand the idea.   Surely   that wouldn’t work for children, that have less comprehension of the worth of cash to start with?

Megan Hogg found the manual system of doling out pocket money too time-consuming.
Megan Hogg found that the manual system of doling out pocket money too time-consuming.   Photo: Janie Barrett

Not so, according to   Spriggy’s founders.

“Most things that children want and need to learn to resist are purchases on the internet,” says Spriggy co-founder Mario Hasanakos, speaking to online shopping and in-app purchases. Hasanakos and co-founder Alexander Badran believe first-hand experience is important to teach children about electronic currency. And three out of five parents surveyed from  the Commonwealth Bank at 2017  believing their children had a more limited comprehension of cash than they had in the same age, partly because of electronic cash, there appears to be demand for this kind of instructional instrument.

Mario Hasanakos (right) and Alex Badran, co-founders of Spriggy.
Mario Hasanakos (right) and Alex Badran, co-founders of all Spriggy.   Photo: Anthony Johnson

The PureProfile poll also found nearly two out of five parents surveyed have been “worried” about their kids ‘ comprehension of electronic currency.

Spriggy works by transferring cash from your parent’s virtual wallet —  which is connected to your debit card or bank accounts and managed in their program —  into the children’s. Parents can set up automatic payments at regular intervals or make these payments manually if required. The children receive a prepaid Visa card and have their very own version of the program, which they can utilize to realize their card balance and transaction history, and also devote pocket  cash into spending or savings targets.

Kids see us with our cards and think that it is just an infinite supply of cash, and I think giving them a card will join the dots.

Megan Hogg

When asked whether   giving children as young as per PayWave card is responsible, Hasanakos describes the app’s safety characteristics. Parents can lock the card, add money liberally in a crisis, and view purchases in real time, letting them follow up with a conversation.   “I wouldn’t dare provide what we provide [the card] when we didn’t provide it with the program,” Hasanakos  says. The cards are also prepaid and parents have the option to turn off contactless payments.

Apps with prepaid debit cards for children have also consumed in Britain, for example Osper, goHenry and nimbl.

Kids' Money Special.
Kids’ Money Particular.  

“I believe that it’s simply a really good, secure and efficient means to start teaching children about the value of cash,” Hogg says. “In the electronic age, children see us with our cards and think that it is just an infinite supply of cash, and I think giving them a card will join the dots.”

Spriggy isn’t the only solution for parents attempting to teach children about electronic currency, and other apps which use virtual cash may offer an additional level of comfort to parents. PiggyBot, PennyOwl Allowance, and RoosterMoney Allowance Tracker all monitor virtual pocket cash payments, with PiggyBot enabling parents to determine just how much can be allocated to saving, spending, and giving to charity. KidsBank provides virtual banking, while ChorePal and BusyKid are focused on rewarding chores. ChorePal rewards actions with virtual things or cash, whilst BusyKid  allows parents to deposit real money   to some holdings accounts that children can use to purchase giftcards or even fractional shares of authentic inventory with their parents’ permission.

Danika Klinkenberg gets her pocket money paid straight into a credit card linked with an app.
Danika Klinkenberg earns her pocket money paid directly to your credit card linked with an app.     Photo: Janie Barrett

In primary schools, most classroom teachers are using Banqer, which simulates a classroom economy, with virtual currency earned for finishing jobs or “job” from the classroom, virtual interest at a rate fixed by the instructor, virtual bank account controlled by the pupils and real things to spend it on, such as essentials like renting your desk and optional extras like being permitted to lease a bean bag to sit down or  the sandwich maker to create a toastie.

What should parents be doing?

More than a year after launching, Spriggy has about 80,000 members  parents and their children —   and they see a enormous variety in how households use the program. Normally, parents give around $10 a year of age per week in pocket money — for example, $10 per week to get a 10-year-old. But some households simply give money as required and other households will put all purchases for their children —  such as things they cover for external of pocket cash like sports charges —  throughout the Spriggy card so that their children understand how much cash is spent on them.

Almost two out of three parents consider pocket money  should be made as a reward for finishing chores around the home, that the PureProfile poll  indicates. In different households it is an expectation that children will help around the house without being paid.

Many children from all backgrounds have been given cash for birthdays and Christmas, even from a very young age. That is particularly so this weekend for households with Asian tradition celebrating Lunar New Year and following the tradition of handing out red envelopes filled with money.

What exactly do parenting experts say?  

Dr Fiona Martin in Sydney Child Psychology Centre says you can begin teaching children about money once they can reevaluate it and understand its purpose.

“From a young age children are  learning that you need to find cash from a wallet, or  maybe you  use a telephone today, to cover items at the shop,” Martin says. “That is a daily living skill that children learn and you may get them involved early — encourage them to count change and promote social abilities to find how much time is, hand them the perfect cash, count the change, ask for the merchandise. It is good for boosting the freedom function of cash along with social skills.”

Martin says it is a matter of personal and cultural preference if to give children cash or tie it errands, and if to make it physical or electronic, and there is no wrong or right. It is important that children help around the house and acquire those lifetime  skills, and a few households might find they need   money as a motivator while some other children naturally want to be involved.

Martin says children also know through monitoring and everyday interactions and she makes sure to include her children    not her newborn however, the three older types aged 11, 8 and 6 —  in her decision making.

“A great deal of it is conversations, discussing the purpose of everything you’re doing … for example, telling them you are  buying the significant packet as it has better worth,” Martin says.

“I recently moved house and … there was furniture no more required, so some items I’ve given to household and other items we’ve sold on apps like Gumtree and eBay and my children are involved in the entire procedure. We’ve talked about somebody else using it and with a goal for it, and us earning some cash from it.”

Hogg’s children each use the Spriggy program  differently. Eleven-year-old Danika saved $30 to get a Kris Kringle gift. Now, she is saving money to spend during a family visit to Queensland, while 14-year-old Harrison uses his aims to save up for excursions with friends. He has set a goal of $50 for bowling and laser skirmish these vacations.

But, both Harrison and Danika believe they spend more than they were used to on small items, like slushies or packs of chips on the way home from college,  as it is a lot easier to transport around the card compared to money. Their cash can be more accessible today than it was since  their parents are not  about to discourage such purchases.

“If anything, it has given them more skill to receive things that perhaps they previously didn’t, whereas previously we were more of a stop-gap,” Hogg says. “But  I believe that is a growth and also an understanding in itself.”

Harrison agrees: “It teaches you self-discipline,” he says.

Additional reporting by Caitlin Fitzsimmons