“Why can I buy a soft drink with just a ‘beep’, and I don’t need to pay any money?” When kids start asking this kind of “reap without sowing” question, parents can explain to them that although physical notes are not involved, they should still value electronic money as it also has to be earned through hard work. Nowadays, there’re so many different kinds of electronic currency. Let’s see at what age one can use which types of digital cash, and start teaching financial literacy for children!


Children’s stage: Start from the Octopus

Once kids have acquired the concept of real money, and saving and paying for goods, you can start telling them that cashless payment is simply a digital record of transactions in place of real cash. For kids from 3 to 11, you can buy them a children’s octopus card and explain that they just need to tap the card on a reader, to complete the transaction. Since Octopus is a stored value card and cannot be used for overdraft transactions, it is a good way to refrain from overspending.

However, since there’s no actual cash involved when using an Octopus, one might be unaware of the amount that one has actually spent. Parents should encourage their children to record all transactions, and teach them the importance of making both ends meet and not spending money they don’t have. Apart from the Octopus enquiry machines, you can also download the Octopus mobile app to check the last transactions.

Teenage stage: Learning to manage finances through EPS

When kids grow older, they can open personal saving accounts in banks to deposit their New Year red pockets and other pocket money. They can now use their ATM card through EPS to make larger transactions in shops. Parents can check their kids’ spending through a monthly bank statement, offer appropriate guidance, and teach them to make budgets and develop a saving habit.

Young adult stage: Using credit cards prudently

At age 18, children can apply for credit cards. Some banks would allow students in colleges or universities to apply for credit cards even when they haven’t got any income to help them plan ahead for personal finance.  Credit cards are about “spending future money”, so parents need to remind their kids not to be misled by advertising and misunderstand that late payments don’t cost much, when in fact credit card interest rates can reach up to 30% p.a. It’s also crucial not to develop an overdraft habit by settling the minimum payment only.

If children have mobile phones, they can also use the digital payment systems such as Apple Pay, Google Pay, O!ePay, Alipay, WeChat Pay, Tap’n Go etc. They just need to link up credit cards or bank accounts to the relevant mobile apps, and verify biometrically with a fingerprint or face detection for a higher security standard. Parents can remind their children not to disclose their passcodes, install anti-virus software on their mobiles, and always cross check their transaction records.

Both parents and kids: Beware of virtual currency

Virtual currency is a type of money that has no connection with real money, and relies on digital accounting records online. The type of virtual currency which kids mostly come in contact with is through virtual games. In these games they need to purchase points with virtual coins. The most-talked about digital currency Bitcoin, however, is in fact a cryptocurrency which is not under the supervision of any bank system. Many countries question its acceptability since Bitcoins have been involved with theft and even illegal transactions, and thus it eventually became a speculative tool. All people, either as kids or parents, should be cautious of this.


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