Cash vs. Apple Pay

By Alec Lindenauer, Chief Allowance Officer

I’m a bit of a techie. I love the toys. Apple Watch, Amazon Echo, Google Hub, XBox … I like ‘em all.

But what about technology and its role in helping to teach my kids about money? I’ve got some seriously mixed feelings here.

In short, very often the goal for technology is to make things faster. But so much of what we need to do to teach our kids about money should be slow. And there's the rub.

An important study out of BYU published in 2022 worked with 4,000 families and found “the most effective thing a parent can do is to provide experiential learning opportunities for their children, allowing them to oversee their own money and practice making financial decisions.”

At the same time, there has been a ton of tech released in the past few years to help make “money easier” for kids and parents alike. But do many of their features run contrary to what the BYU study has so clearly detailed?

Look at Apple Pay as an example. It’s super convenient. Fast as lightning. But what do we give up when we use it over cash? And what about when our kids use it?

Not so long ago, I wrote in a newsletter to our COR community about taking my family out for pizza one Friday night. When the check came, I noticed the QR code on my receipt with the tagline, “Use your phone to pay.”

I opened my camera app and tapped the code. Like magic, my browser app showed me my bill, suggested a tip, and prompted a double click to use Apple Pay.

The whole process took 30 seconds. No need to give the server the credit card, wait for the card to come back, sign, calculate the tip, etc. When I got up to leave, one of my daughters said surprisingly, “What, you paid already?!?” She hadn’t even noticed.

With a credit card, my kids see me talking to the server and calculating the tip. Sometimes, they ask to guess the total. Other times, I’d ask them to figure out the tip. And still other times, they have questions about credit cards, spending, and more. The slower process of paying with a credit card presents so many more chances to take a breath, and have a money conversation.

Granted, I could have done some of that with Apple Pay. But frankly, it was so fast that I didn’t even stop to think about it. In this tech world of iGratification, the moment had passed.

And what about when kids use Apple Pay or debit cards? What’s lost there compared to a cash purchase? A lot.

In fact, cash is alive and well in my house for both my middle and high schooler. For both of them, we use cash to complement their debit cards and Apple Pay, and never as purely a replacement. On top of that, I always recommend that parents just starting on the money lesson train do so with cash in hand.

Why? I want my kids to understand the value of a dollar.

Want to know the very simple definition of someone actively valuing a dollar? It’s when they're trading a dollar for something they value.  

How is a child supposed to value a dollar if dollars are just an abstract concept? It’s much easier to value something you touch and own, rather than something in the ether that you just imagine when swiping or tapping at a magical tiny kiosk.

When I paid for the pizza dinner, the process was instant. I don’t want my child’s buying experiences to be instant. I actually want it to be painful. Yes, painful!

I want my child to stand at the register and literally wrestle with the idea of parting with their cash. I want them to debate internally about giving their money to the cashier. And when they get change, I want them to make sure it has come back correctly … right down to the penny.

As money is handed back to them, they’re physically counting and making sure their rightful funds go back into their wallets. Why do they care at that moment? Because they’re valuing their dollars.

All of that is sped up way too much with a debit card and payment apps. Only after they “mastered” the art of purchasing with cash, did I introduce my kids to a debit card. As much as I focus on teaching them about money, they were amongst the last of their friends to get those tools. And, even now, my high schooler still uses a hybrid approach.

All of that said, if we keep BYU’s study in mind to create “experiential learning opportunities” for our children more than anything else, I ask you … Cash or app? Which is more experiential?

Think you'd like to try setting up a monthly allowance with your child? Join us for our monthly 5-Day Allowance Challenge to learn how!