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The Problem with Virtual Money

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I hate to admit it, but despite my best efforts, my kids are clearly part of the “entitlement” generation. They have a lot of toys, a lot of clothes…a lot of stuff. And when they break something (as they inevitably do), their immediate reaction isn’t sadness or disappointment; it’s “that’s okay—we can just buy a new one!”

My husband and I try to instill in our girls the importance of saving and spending wisely. Of course, they’re only three and five, so it’s a challenge. But here’s what makes the task even harder: they’re growing up in a world where physical money is becoming an endangered species.

Whenever our kids see us pay for anything—in the grocery story, at a coffee shop, in a restaurant—it’s with a magical little square of plastic that, from their perspective, has an endless capacity to get them whatever they need or want. Other than the loonies they occasionally receive from their grandparents for their piggy banks, money, for them, is a purely theoretical concept.

According to a 2015 survey by Pew Research, 57% of smartphone users used their phone to do online banking in the previous year—and that number’s bound to grow. Remember when you had to stand in line and see a teller to deposit a cheque? My husband took our older daughter to open her first bank account the other day and discovered the bank doesn’t even give out passbooks anymore.

So many financial transactions today are done quickly and virtually, at the touch of a button. But there’s a danger in this convenience: it’s easy to forget there’s actual money changing hands.

No wonder younger generations struggle to understand how to save and invest. A recent TD survey found almost a third (32%) of millennials say they’re “not at all knowledgeable” about retirement savings plans—and that’s just the millennials. What will happen to Gen Zs when they reach retirement age? With increased life expectancies, will they be working into their 70s or 80s because they can’t afford to retire?

And whose responsibility is financial education, anyway? Parents must play a role, but let’s be honest: we don’t always set a good example. My generation is very comfortable with debt—perhaps a little too comfortable. No money? No problem! Unlike our boomer parents, who saved up and bought their cars with hard-earned cash, we’ve always used credit to finance major (okay, and minor) purchases.

Delivering financial education through the school system might help future generations develop better habits, and it needs to start at a young age. Literacy is a major part of their early education, so why not financial literacy, too?

For my part, I’ll keep explaining to my kids the value of a hard-earned dollar. And that those magical card transactions translate into real money—even if it doesn’t always look that way.

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