11 March 2008

Give your toddler his own "credit cards"

Marie protected her credit cards by finding her son some of his own:

Around when he turned one-year-old, our son started to love to play with our wallets, especially the credit/bank cards and licenses. We didn't want to risk it (we all know how fast a toddler can lose something!) so we started giving him his own 'credit cards.' We keep the cardboard (and occasionally, plastic) mock cards that come with some junk mail/credit card offers. He has a little gift card tin he keeps his cards in which he loves opening and closing, taking them out and putting them back in again. He's only allowed to play with his cards so now ours are safe! He also has an old photo license of mine that he loves to play with too. Once we can find a child's wallet that is washable and easy for him to open, we'll be putting his cards, some family pictures, and his own 'license' (easy to make with a small photo, paper, and a sheet of laminate) in it so he can have his own wallet.

Related: Hotel card keys as play credit cards

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I knew it was a different world than when I grew up when I gave my eldest (as a toddler) one of those fake cards, he grabbed my hand, folded it into a fist, 'zipped' the card through the gap between two fingers and then pretend punched in a PIN on my other knuckles. Oy! Yeah, I took him with me to the grocery store a lot, why do you ask? LOL!

We have to keep track of whose turn it is for the next fake cards coming into the house, they're so popular as toys. They also love our expired museum and zoo membership cards (cool pictures on them, too!), but we leave these all at home for play - don't want them losing stuff with my name on it, really.

Ohhh this to me is not a good idea. I don't want my child to think it's "cool" and "grown up" to be in debt and have credit cards. I know it seems cute and I do like the wallet with pictures idea, and I'm not one of those people that think you shouldn't have nice things and I use my ATM card too, but being in debt is not a good thing even though it is "normal" today. I'd rather teach my child to pay with cash and never have to borrow money, basically I'm teaching my children "Don't buy stuff you can't afford". I'm sure I'll get some backlash from my comment because I sound a little extreme but it's just my opinion and I'm not judging anyone if they like the idea.

I hope that cash will still be a popular toy when mine gets to that age, too, Gina, mainly because it teaches math! But remember that cards do not equal debt. I'm debt-free but still rarely use cash--that's what bank cards are for.

Anyone have experience in how to teach kids that money does not grow on trees when you pull out a card for everything? It seems hard enough to teach them that the wallet does not magically fill with money.

Flynn, I agree that cards do not equal debt but there has also been studies done by Dunn and Bradstreet that when you "swipe" you spend 12-18% more than if you pay cash because cash is "painful". I know how hard it is to plop down a $50 bill but to "swipe" is like I'm not really spending the money. Sorry...I don't want to turn this post into some crazy debate. I'm just so passionate about people not getting buried in money problems, especially the next generation. I don't want my kids to make the same mistakes I have.

We actually give my 8 year old "commissions" when he does chores. $5 a week for 5 chores and if he doesn't do some, like sweep the front porch, he has to pay one of us $1 to do it. Then he has three separate buckets, 1 for Saving, 1 for Spending, and 1 for Giving. Every time he gets money he has to split it between the three. We don't tell him how to split and let him do that on his own but it teaches him that he has to "work" to get money to buy stuff he wants. We are also teaching him how to save for "big" stuff he wants and also teaching him how to "give" too. It's working pretty good so far. When we go on trips he is excited to bring his wallet with him and his own spending money to buy things. Even at Christmas time, we have him write down who he wants to buy for, then have him take some of his spending money out to purchase it so he can get an idea of how fast money goes.

Our toddlers have a few of those cards that come in the mail with offers. We shred the paperwork and the kiddo gets one of daddy's old wallets to put his cards in.

Actually, it was quite funny when my oldest had one of his "play" cards in his pocket when we went to the store. I didn't know he had it in there and it was an old gift card to the store we were at. We pulled up to the register and he whipped it out. *chuckles* I had to explain that no his card didn't quite have enough but I appreciated his offer to pay. ^-^

I don't think cards should replace cash either and I look forward to the days when I can teach my kiddos how to handle their money. But for now their play wallet with fake cards in it makes them happy.

Flynn: I explain that when I go to the ATM I give my card and password so the bank will know they have my permission to give me some of MY money that they keep safe for me. When I write a check or sign a credit statement, I explain that I've just signed a "permission slip" for that person or store to get some of my money from the bank.

My 6yo was just reading over my shoulder, so I quizzed him about what happens when I zip my credit cards through the machines at stores. He seems to get it.

I do tend to agree that most young children think that all you have to do is swipe a card, and ta-dah! All is paid for - it's magic money!! I also agree that kids just naturally want to do what they've seen mom and dad do countless times, so of course they'd be thrilled with being able to play with their own "cards", but I have to say, that it does probably reinforce the idea that money is this thing that magically appears to pay for things when a card is swiped. So do take some time to explain this to your children - it's amazing what even a 3 or 4-year old can understand.

To combat some of the issues mentioned we have them get gift cards with their cash that way they can use it at stores. They save their money in a bank and then they go to the store to get gift cards. We mostly do this at WFM, so that they buy their own candy/cookies/treats. If they run out of money on a card then they take some Giraffe money(there bank is Giraffe shaped) and reload. They also donate some of their bank money into the general fund, to buy household groceries or clothing. Also if they get cash from grandparents, or whatnot they often choose to save it in their Giraffe because they are saving for a computer. They are young still, 2 and 3 so who knows how long this will work for.

My 3 year old likes the idea of playing with cards too since she sees them in our wallets even though we use mostly cash. She would have fun but, I make sure she never gets hold of one of those fake cards sent by the credit card companies. I believe they probably send them out to market to children just as Joe Camel was marketed to kids. These companies aren't stupid. Brand recognition is a BIG deal. I don't want my children to have fond childhood memories of American Express for which to attach emotions.

Wow, what a great post and great comments! All comments are really terrific and very valid. I especially like the idea of combining all strategies by teaching kids how to work for and earn money (so they don't think it grows on trees or just magically comes from a plastic card) and use a regular old traditional piggy bank (or something like it) to store the physical cash so they learn monetary denominations and math skills. Then when they accumulate enough, go and get a gift card so they learn the lesson of using "safe" currency. Even a travelers check later on down the road. I rarely carry much cash at all just because it's unsafe. I would much rather carry a card in the form of a debit or gift card. I agree that the child (no matter how young) needs to learn about how money is acquired first and then how money is managed, (I love the spend, save, give - like on Jumping Monkeys podcast-and then how money is spent or carried safely. So I guess the whole point for me is don't give them the American Express cards to play with, give them the decorative WalMart or Target GIFT CARDS to play with that have been spent and teach them what they are and how they are used. They can pretend with their 'fake' cards so the real cards will still work when you go to use them at the store. Thanks to all the comments. Great topic! (Going to remove the fake credit cards and replace them with spent gift cards)

We also combine the lessons, and deal with cash a lot, too. Mainly groceries and other 'planned purchases' are card, other purchases cash.

I like the transition to gift card, will have to think about that. Right now, we use the Cash Cache from MoneySavvyGeneration (.com?) for the eldest (it has a nice way of tracking goals as well as places to put money for saving, spending, donating, and investing). The next is just about to transition from plain 'save to spend'/donate to the more complex four-compartment system. It definitely worked for the eldest - at 10, he's very aware of how much money he has, where it comes from, how long it takes to accumulate (including interest), what he wants, how much that costs, and how long it will take to save for that. And that's despite the 'playing with plastic' thing. So I think it can all work (and boy, all our kids are into paper and coin money, too... which provides plenty of opportunities to talk about what money is, how it works, how to make it grow, how to be patient and keep goals in mind - even when it is almost physically painful to do so, etc.).

Oh, and MSG also has piggy banks of various sorts that have the four compartments, so they can just plunk their coins/cash in each as they go. (We let it be their choice how much goes where, rather than forcing a divide, then talk about how that affects what comes back out later.)

We give our 9 month old spent gift cards. Right now it's a Starbucks card. This came about after a month of her grabbing and dropping my credit card in very busy places.

I can see the concern about debt, especially since it's a problem that we are dealing with and hope that she never does. We fully intend to teach her about DEBIT cards and the problems with Credit cards.

I don't believe that she will have to deal with cash by the time she graduates from high school. I only carry cash to buy lunch at the office once a week. If I didn't have that cash, I would have to bring my own lunch. Having cash causes me to spend more than I would without it!

For me, taking money out of my wallet is way less painful than taking it out of my bank account, so I hardly ever carry cash unless we're going to the farmers' market or something. But we keep a very close eye on our finances (I update Quicken every day), so never has my debit card felt like "magic money." I highly recommend Quicken - it shows you a pie chart at the end of each month so that you can see where your money has gone, which can be painful, but eye-opening!

We use those "fake' cards and old hotel cards, and I got a cloth photo wallet free with some picture developing for her to put her cards in. Remember, cards aren't just credit - they are also for health cards, licenses, and so on. I think your values about money are a separate issue, and do need to be taught, but I think cards of many types are also part of modern life and will be rflected in our kids' play.

I never return hotel room keys anymore; Rachel loves to play with them. Now that she's 6, we even let her run the coded keys to open the door, although we still hold them to make sure they don't get lost.

I thought my son was the only one with this same obsession..lol We bought daddy a new wallet, and gave our son his old one (and I mean OLD). I do like the idea of the photo ID with your child's picture on it. On the off chance that he gets away from you somewhere, he has his very own identification, and can easily be returned!

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