Teaching kids about digital money

My ten year old son got an iPod for Christmas. I set up his Apple ID as part of Apples Family Sharing system. This allows me to approve everything he downloads and purchases. As the account uses my credit card he isn’t really paying for the downloads and doesn’t completely grasp the the cost involved.

It’s a difficult concept for kids – ‘invisible money’ or digital money.

If you don’t have the actual money in your hand it can be hard to understand the value of it. The last two apps my son got cost $2.49 each. He had just received $5 from the tooth fairy (for losing his molar), I explained that if he wanted to download the apps he would need to give me the tooth fairy money. I felt it was important to put it into real, traditional money terms.

He is ten and understands to an extent, whereas my 4 year old thinks we have an endless supply of movies and TV shows available on iTunes/Apple TV…at no cost.

4 year old: Can we get this movie?

Me: It’s $24.99 ?!

4 year old: But can’t we just download it?

And that’s it really. There is no connection between downloading it and money or cost.


The Commonwealth Bank is set to expand it’s commitment to the financial education of children, amid new research showing that our increasingly cashless society is impacting the way children understand the value of money.

The Bank have a program, StartSmart, which has been running since 2007. The Bank will invest $50 million over the next three years to enhance its financial education programs beginning with an ambitious plan to double the reach of StartSmart by 2016, allowing 500,000 children to complete the free financial literacy workshop every year.ย The new StartSmart program will include an enhanced curriculum focused on both digital and traditional financial literacy skills.


Some of the findings from the research come as no surprise:

  • 40% of five year olds believe you can use a plastic card to get free money from a machine in the wall.
  • You donโ€™t have to pay money to watch movies on your parentsโ€™ tablets or smartphone (61 per cent of six year olds);
  • You don’t have to pay money when you buy something like a toy or computer game on a computer (18 per cent of seven year olds).


Some good news is that 73% of parents have taken some action to teach their children the value of digital money. ย The top five lessons used to teach children include:

  • Purchasing and downloading an app or game with them (29 per cent);
  • Showing them the value of an item at an online store (25 per cent);
  • Opening an online bank or savings account with them (17 per cent);
  • Giving them a pre-paid card so they can make digital purchases (16 per cent); and
  • Allowing them to spend all their pocket money on one digital purchase (14 per cent).


Have you discussed digital money with your children?

Love Mummahh

Notes about the research: A total of 1027 surveys among parent of children aged 5-16. 521 surveys among children aged 5-16. Surveys were conducted in December 2014.

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