Money Isn’t Everything, But Understanding It Sure Helps


Are we raising a generation of children who will be less equipped to deal with money and the financial obligations of day-to-day life than any generation before them?

Has the (unbelievably swift) transition to a cashless society, coupled with an economy almost entirely based upon consumer spending, left parents unprepared to teach their children anything about even the most rudimentary principles of finance and accounting? Robert Cole, a financial journalist at the Times Online, would say so. According to Mr. Cole, society’s move towards ever more abstract forms of money has meant that children — not to mention their parents — may have difficulty learning about where money comes from, how difficult it can be to obtain, and the very real consequences of overspending.

Abstractions are usually more difficult to comprehend than are concrete examples. If a dietician tells you that you may have 2000 calories tomorrow without over- or under-eating, this is an abstraction. The 2000 calories seem limitless. If, on the other hand, you are led to a table on which your 2000 calories are displayed as portions of fruit, vegetables, skinless chicken, milk, and so on, it clarifies your idea of what those calories actually mean. One might be less inclined to sneak a doughnut if one realized that it represented the same number of calories as does a chicken breast, four spears of broccoli, and a cup of carrot coins, say.

Money is itself a sort of abstraction, of course, that saves us the trouble of completing straight barter deals on every item we wish to acquire (“I’ll give you a million kilos of carrots for that Chevrolet Malibu.” “Sold!”) Money is just stuff to which we assign an arbitrary value by common consent, after all — there’s nothing in a $20 bill that is in and of itself worth $20 — not the paper, not the ink. It’s worth $20 because we agree that it is. That’s tough enough to understand when you are a child and every idea is new and challenging.

But cashless money, in the sense of debit and credit transactions, is just that little bit more abstract and vague. When a child never sees money, how can we expect him to understand that sometimes there is not enough to buy him what he wants? Why could he spend ten dollars yesterday on a whim, and not today? The tangible possession of money is a powerful teaching tool, as in “If you don’t have the money physically in your hand, you cannot spend it.” We see this respect for money develop, to some extent, in our teenaged customers who often go, during the period of a year or so, from being children with pocket money to young adults who hold part-time jobs that suddenly supply their spending allowance. When they come to purchase an item, we watch them pick it up and hold it, hefting the thing as if to weigh it against the money that it costs, and you can almost see the wheels going round inside their heads: “This game costs $40. That is, roughly four and one-half hours of cleaning the grease pit at the restaurant where I work is required to make enough money to purchase this game. How badly do I want this?”

I don’t suppose that one can turn back the clock as far as a cashless society is concerned, nor would I really want to (some estimates place Canadians as the world leaders in debit or bank card use for commercial transactions). Arguably, though, parents have to step up and teach their children that money does not grow on trees, much less in ATMs or Interac terminals.

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