In the midst of the online cultural shift that we’ve seen in the last five years, it’s no secret that online shopping is becoming more of a social norm every day. Though online shopping can be extremely convenient and user-friendly, it can also pose a whole new set of rules and guidelines that parents have to be prepared to teach their children; after all, our children were born into this sort of thing. Whether its real items like clothes and books or virtual goods like digital songs and games, it suffices to say that online shopping has given a whole new meaning to “allowance”.
I think that Ted Sorom from Rixty.com made a good argument about this in a recent Businessweek.com article. In the article, Sorom claimed that parents should give their children a “digital” allowance in the form of a debit card or a prepaid credit card. I think he made a good point when he said that “teens have vibrant online lives” and that a lot of the things they want they can’t get in an actual store. And it makes sense when you think of all of the digital goods that children are surrounded with these days: MP3s, clothes, digital books, mobile apps, digital video games.
But the backbone of Sorom’s argument was his claim that by giving teens and tweens a digital allowance, parents can essentially take the cash they were going to give their child and just give it to them in the form of a debit card or prepaid credit card/voucher. This will allow them the freedom to purchase things online, virtual or real, and at the same time limit their children to a set amount of money that they’ve earned themselves.
I think that Sorom makes a very sound argument. This will not only allow parents to compromise with their kids’ online shopping desires, but it will also act as good practice for proper financial budgeting and credit card etiquette in their future.
In addition to Sorom’s argument, I think that five or 10 years ago I would’ve been a bit more hesitant with advocating for a child having a debit card. But I think that the business of e-commerce has improved vastly over the last 10 years and even more so in the last five. With that said, I think it’s safe to say that the idea of a digital allowance isn’t one that’s too radical to consider. I think that it’s a step in the right direction to teaching our children the do’s and don’ts of the Internet while at the same time teaching them how to be responsible with their money.
Great blog, Just wanted to say that i can’t connect to your rss feed, you should install a wordpress plugin for that to workthat.
this has put my mind to work………….. i never thought of myself as “old school.” maybe i can’t really wrap my mind around this since my children are still young 5&6 right now. i like that my kids have physical money to look at for their earnings. they are both learning to count money and learning how to recycle and get money from their recycled materials. they also have chores BUT they have yet to receive money for it. i think that if they can’t see the money then they wont think that they were fairly rewarded. maybe by the time my kids are tweens or teens this will be an easier idea for me. i also think that there is a safety issue here. it will be necessary for my tween to have access to a credit card in case they get into some situation that requires them to use it emergently.
thank you for this thought provoking article. it surely got my gears turning.
Janet,
Yes this article does push us to think outside the box. I totally agree that young children learn by seeing, feeling and experiencing what it is like to have some “real” money. It is amazing to me how many children believe that money is on credit cards without any information that tells them that there is a bill that that arrives for the parent to pay.
What we now teach about money with the jars for saving is not what they observe in the real world. Parents rarely buy things with cash today, or if they do their children see them going to the ATM machine at the bank and coming back to the car with money in their hands.
By the time your children are ready for the emergency credit card will it be funded with your money or their money? These are big questions we all need to be thinking about in advance.
i think that it would be funded with my money then depending on the situation it will be paid back or 1/2 depending on the use. BUT i could see them having an allowance on a credit card. and my kids know that the bill does come AND we go over it together sometimes so they can see how it all adds up. THEN i even go sa far as to show them my pay check so they can see what money is coming in and leaving.. i LOVE to see their eyes get big..
Janet,
Thanks for your contribution. You are way ahead of the curve in educating your children about credit or debit cards. It is amazing that you are so open. You clearly don’t hesitate to show your five and six year old the big numbers that make their eyes “bulge”.
The large numbers can seem incomprehensible to young children, but when you show them the big numbers of what a mortgage and taxes cost and they do the subtraction with you, they begin to get the concept that thousands of dollars don’t stretch as far as they would imagine.
Utilities are also something children take for granted. Once they understand that in many countries there is not enough water to take a bath and that children in Bolivia for example, go to school without a bath, they get perspective on conservation like never before.
It would be great if you would share with other parents what the impact has been on your young children of seeing the real numbers and where money goes. There are many parents who believe that such information is something to keep away from children. I think there is a lot of fear today about overwhelming children that gets in the way of helping them understand and master the problems that come as a part of daily life.
Thank you for the insightful post. As someone who relies heavily on her laptop, ipod and cell phone, I can see the benefits from having a digital allowance.
Last night we went to see the move The Social Network. This movie is constructed on the powerful theme of good vs. evil and delivers. Yet it could have been so much more.
Lawrence Lessig a professor at Harvard Law School writes a compelling review. http://www.tnr.com/article/books-and-arts/78081/sorkin-zuckerberg-the-social-network?page=0%2C0
Lessig brings up a very important issue for us to address, the “ethics of internet creativity”. He directs our attention to the undermining of the enormous potential of social networks and internet creativity. After you watch the movie, I urge you to read his review. Keep in mind the value of a platform that affords all with the opportunity,
“where the creator gets to speak directly to an audience, where an audience is brought on stage, and talks back.”
Think about free speech, think about real people without monetary and political controls over our heads, having the opportunity to speak with one another. As Lessig points out this is a powerful opportunity we currently have, yet it may be at risk.
I would love to hear other ideas, reactions and comments.
I am very thankful to this topic because it really gives useful information `..