Here’s a fun thought experiment: When was the last time your kid actually saw you pay for something with physical money? If you’re drawing a blank, you’re not alone. Between Apple Pay, tap-to-pay cards, and one-click checkouts, our kids are growing up thinking money is just… magic? A thing that appears when you tap your phone?
And yet, we’re supposed to teach them about money? That it’s finite, that it requires trade-offs, and that you can’t just buy everything you want? Greeeeeaaaaat. No pressure.
Victor Wang, CEO of Stockpile and finance expert, gets it. “How do you teach kids about money in an increasingly cashless world where they don’t see physical dollars changing hands?” It’s not a rhetorical question. It’s the parenting challenge of our generation, and he’s got some surprisingly practical solutions.
Make money visible again
The first step is counterintuitive: in our digital world, we need to go old school. “Make money visible,” Wang advises. “If they’re in preschool, have them pay coins to a cashier when you’re at a shop. Get them to put a coin in a jar daily or weekly, so they can see how the cash accumulates over time.”
The reason? Seeing and handling physical money early on helps make digital payments make more sense later. It’s like learning to read with physical books before graduating to e-readers. The tangible version creates a foundation for understanding the abstract version.
For older kids who’ve somehow made it this far without seeing actual currency (no judgment, we’ve all been there), Wang suggests showing them real bills and a receipt. “Many kids have never seen paper money up close before!” he notes. Match the grocery items you’ve taken home to the prices on the receipt. Make it a game: “Can you find the cereal we bought? How much did it cost?”
Bridge the physical-to-digital gap
Once they understand that physical money represents value, it’s time to connect it to digital transactions. “Walk them through banking or investing apps and explain how transactions work,” Wang suggests. “Have them check a balance before and after using a debit card.”
This is where it gets real for tweens especially. Show them how that $47 in their account becomes $32 after they buy that game. Watch the number go down together. It sounds simple, but for kids who’ve grown up in a cashless world, seeing that digital number decrease is often the first time they truly grasp that money isn’t infinite.
Wang also recommends using visual aids like charts and trackers to keep money tangible. Think of it as making the invisible visible. Whether it’s a savings tracker on the fridge or a simple spreadsheet showing their allowance history, anything that translates abstract digital money into something they can see and track helps.
Here’s a practical approach for different ages:
Preschoolers: Explain how debit cards work at a very basic level. “This card tells the store to take money from our special money holder. When we use it, we have less money left.”
Elementary schoolers: Talk through basic choices at the grocery store. Identify needs versus wants and make price comparisons together. Let them see you decide between the $6 fancy yogurt and the $3 store brand.
Tweens: Explain how debit cards and digital payments actually work, what they are, and how balances change with every purchase. Show them your banking app (age-appropriate version, obviously—they don’t need to see your therapy bills).
Turn digital spending into a learning lab
Now let’s talk about the elephant in the room: in-app purchases, Robux, V-Bucks, and whatever new digital currency will exist by the time you’re reading this. If you’ve ever felt like the bad guy for not buying your kid a Fortnite skin, Wang has a better approach.
“Use digital spending to teach budgeting, not just to police it,” he suggests. Give kids a small, set amount for in-app or online purchases and let them decide how to use it. Maybe they’ll grab a skin now or save for a bundle later.
The key is talking through the trade-offs. “If you spend all your game money today, what will you have left when you continue playing tomorrow?” This helps them connect clicks to consequences. When their set amount is gone, it’s gone. The limit helps impart the lesson.
Think of it this way: digital spending is actually a fantastic practice ground because the stakes are relatively low. Better they learn about impulse purchases and buyer’s remorse over Roblox accessories than over a car lease in their twenties.
The “but everyone else has it” conversation
Whether it’s the latest gaming console, designer sneakers, or some collectible that’s apparently essential for elementary school survival, we’ve all faced the “but all my friends have it” conversation. Wang calls this a great opportunity to teach wants versus needs.
Here’s his three-step framework:
1. Start with empathy. “I get it; it’s hard when all your friends have a limited edition Labubu.” Acknowledge their feelings without immediately jumping to “no.”
2. Explain the bigger picture. “Every family makes different choices with their money. These different choices come down to different priorities.” Help them understand that it’s not about whether you can afford it (even if that’s true), it’s about what your family values.
3. State your choice and offer agency. “We’re choosing to save for a trip instead” gives them the “why.” But don’t just stop there. “If it’s important to you, let’s look at ways to help you save for it” gives them power and options.
This approach does a few things. It validates their feelings, teaches them about family values and priorities, and shows them they’re not powerless. They can work toward things that matter to them. Plus, there’s something beautiful about watching a kid who desperately “needed” something suddenly lose interest once they realize how long it’ll take to save for it.
The bottom line
Teaching kids about money in a cashless world requires more intentionality than it did for previous generations. We can’t rely on kids absorbing financial literacy through osmosis by watching us count change or balance a checkbook (remember those?).
But here’s the good news: the fundamentals haven’t changed. Kids still need to understand that money is finite, that choices have trade-offs, and that they have agency over their financial decisions. We just need to be more creative about making those lessons visible in an invisible-money world.
Start with physical money when they’re young. Bridge to digital as they grow. Use their digital spending habits as teaching moments instead of battles. Include them in age-appropriate family money decisions. And remember that you don’t have to be a financial expert to raise financially confident kids.
As Wang reminds us: “Help kids see money as a tool, not a mystery or stressor.” In a world where money has become increasingly mysterious, that’s the gift we can give our kids. Even if we’re figuring it out as we go, one tap-to-pay transaction at a time.