back to article Kids these days will never understand the value of money

Where’s all the money gone? I don’t mean why it’s flowing out of your bank account in ever greater volumes. Actually, I do mean that, but in the most immediate, tangible way. Not very long ago, you knew what you spent because you could count the banknotes as you handed them over. Money was physical, tangible, and real. That’s …

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  1. Marketing Hack Silver badge
    Paris Hilton

    The problem with this is spending discipline

    Behavioral economic studies have clearly demonstrated that people are disciplined about spending when they have to shell out banknotes instead of swiping a card or using a mobile payment service.

    (Paris--because she doesn't worry about maxing out her credit card.)

    1. big_D Silver badge

      Re: The problem with this is spending discipline

      I was brought up with pocket money, and what I didn't have in my pocket, I couldn't spend.

      That carried over to when I started earning and, apart from 2 occassions, where I was travelling and didn't get the credit card balance paid off in full in time, I have never paid interest on my credit card - in fact, between 2003 and 2008 the card had a balance of +42UKP on it, because I overpaid and then didn't use the card for a couple of years. Unfortunately, they don't pay interest back, if you are in credit.

      Now, the credit card I have in Germany is directly linked to my bank account and is always paid off 100% at the end of the month, if I don't have the funds to cover the balance, then it goes on my overdraught. That is the way credit card work over here, for the most part.

      But the discipline I learnt as a child means that I don't spend money that I don't have. I don't pay for anything without first calculating, whether I can afford it and that I won't slip into the red at the end of the month.

      The only thing I have paid for on credit is the house.

      My wife grew up the same way and her children have also learnt the same lesson, so they are very careful in what they pay out and make sure that they never go overdrawn and always have a small reserve for emergencies.

      I feel that this lesson is being missed out on by an ever larger part of the population.

      1. frank ly Silver badge

        Re: The problem with this is spending discipline

        You seem to have got your hands on a German bank hybrid debit card of some kind. Hint: it's not really a credit card.

        1. Prst. V.Jeltz Silver badge

          Re: The problem with this is spending discipline

          "German bank hybrid debit card "

          Nothing that cant easily be replicated by telling your current account to pay off your Credit Card in full every month. Thats probly what he's doing.

        2. big_D Silver badge

          Re: The problem with this is spending discipline

          The bank automatically attaches the credit card (Visa or Mastercard) to your current account and they take 100% of the balance at the end of the month. No option.

          I also have a debit card, which works like it should. I only use the credit card for online purchases.

          1. frank ly Silver badge

            Re: The problem with this is spending discipline

            So it takes the money out of your bank account with up to a month delay, depending on when you make the purchase. It's not really a credit card.

            1. Anonymous Coward
              Anonymous Coward

              Re: The problem with this is spending discipline

              Do you understand the definition of credit?

              Payment in advance to be paid at a later date.

              OneAccount do exactly the same with their credit card in the UK.

    2. Eddy Ito Silver badge

      Re: The problem with this is spending discipline

      I'm not convinced the studies are going to be valid much longer. Sure, if you're used to banknotes there may be a disconnect but if you've been brought up on debit/credit cards then it likely means you learn differently. There is nothing stopping a youngster, with parental permission of course, from getting a debit or check card as many banks are now offering such accounts to children as young as 13 and it functions largely same as the adult version.

      The fact that tangible bills aren't being passed about won't matter since the bills themselves have no inherent value other than that bestowed upon them by fiat. The only difficulty is going to know the exact "value" of the card since they can't simply open their wallet and count what is left. This is naturally where phones or other devices will come in being able to display the remaining balance. No, I think it's going to be more a matter of familiarity than anything else.

      Consider that I don't carry cash and haven't for quite some time and I'm quite aware of how any purchase will impact me but of course, I was taught to throw nickels like manhole covers. The only reason I keep a few dollars in my pocket is for when I have to pay a toll on the roadway if I've got the wrong transponder since nearly none will take credit cards. In fact, I believe they are the very same bills that I put into the wallet when it was new quite some years ago and they are likely to be the ones which go into the next wallet as well.

      I'll finish by saying I find the heading a bit misleading. The value of money is ambiguous since money can be the cash in your pocket or how much you have banked. The cash in your pocket is real tangible bills but that in the bank is merely a representation of value. To that end kids may never know cash nor its value but they will absolutely know the value of money in the bank.

  2. Richard Jones 1
    WTF?

    Am I the only one demanding a paper receipt?

    Whatever transaction I conduct I want a paper receipt to keep track of what I spend or to prove that I have paid for the item. I track every item at home and check every statement as it comes in, all unexpected items are immediately queried. Perhaps this is because I draw no line between cash or money in a column of figures on a sheet or on computer screen. Perhaps it is also why I carry no debts and do not borrow, why pay interest and double the cost of an item?

    Wave and pay has yet to have any advantage for me and as for huge modern mobiles, I do not want anything that large and I certainly don't want to keep handling or touching the damned thing. Shirt pocket size is big enough for me and until I can get the functions I use in anything to replace the ten your old phone I now use the pressures is to not downgrade.

    @Marketing Hack is right people feel the pain when they physically pay out, once you have learned the connection, changing the payment method still involves the realisation of money changing hands, mine to theirs, the method drops out of the equation.

    Perhaps I should get into usury business now to benefit from this brave new world, but if it involves using a 'phone the size of a paperback book, perhaps I will not bother.

    1. allthecoolshortnamesweretaken Silver badge

      Re: Am I the only one demanding a paper receipt?

      No.

      "No accounting entry without documentation!"

      Disclaimer: my first spouse was an ex-banker-turned-accountant.

  3. heyrick Silver badge

    A few years back

    ...one of my banks switched the statement to itemising by category rather than by date. Accordingly I do most of my transactions with the other bank that still lists activity by date... but then they're hassling for me to "go electronic" and choose to receive easily forgotten statements by email...

    Remember, it's not in their interests for us to keep track of our money.

    1. d3vy Silver badge

      Re: A few years back

      "go electronic and choose to receive easily forgotten statements by email"

      I'd suggest this is the best path to go down anyway... Check your balance in real-time on the internet/via an app.

      If your concern is around security (anecdotal as it is) I've been using online banking since 2001, I've had one instance of identity theft in that time... Because someone got hold of a *paper* copy of a statement/other bank correspondence and used that as proof of ID.

      1. Shady

        Re: A few years back

        "Realtime" via an app doesn't exist, at least for HSBC. I can't comment on other banks. I've gone cash-only since Christmas, in part because I couldn't figure out where £200 - £400 per month was going.

        When making a purchase I'd check my balance - plenty of funds - make the purchase, then get a text at 6pm. Overdrawn. Check phone and anywhere from £50 - £500 in transactions have shown up.

        So, transfer cash from main account to my account and everything is balanced. But then I get a text at 7am the next morning saying I'm overdrawn again. And it's not like this was caused by purchases made yesterday, some of these purchases were made a week ago!

        So for me at least, realtime needs to be *actually realtime* - If I'm going to rely on my app to tell me what my available funds are, it has to be up to the second, no exceptions.

        As it is, going cash-only is something I've been intending to do for some time, and I regret not doing it sooner - I give myself "walking around money" every Friday, and when it's gone, it's gone - I am disciplined enough not to draw more cash if I run out, and learnt to stretch the cash I have in my pocket, and I'm about £300 / month better off for it

        1. Beamerboy

          Re: A few years back

          I find the banking apps that I use are generally up to date, at least to the day before for purchases, and this includes HSBC. As an example I sometimes have cash which I deposit into a Nationwide account as its most convenient, then as I leave the branch log on to the app, move some of the deposit to my day-to-day HSBC account, which has appeared by the time I have logged into the HSBC app. Now this is real-time magic

          1. Steve the Cynic Silver badge

            Re: A few years back

            "I find the banking apps that I use are generally up to date, at least to the day before for purchases"

            My French bank (I live in France, duh) updates the on-line / app readable account information four times a day, except for transfers between my current and savings accounts, which generally update the balances in a few seconds at any time of day or night.

  4. heyrick Silver badge

    The bank of mum and dad gave me pocket money

    And it wasn't a lot. When I asked for more, they said go get a paper round.

    Somehow I found that I appreciated the money I earned more. The given money is spend on stupid things, the earned money I'd save for something I wanted.

    1. scrubber

      Re: The bank of mum and dad gave me pocket money

      "get a paper round"

      What's a paper?

      1. Anonymous Coward
        Anonymous Coward

        Re: The bank of mum and dad gave me pocket money

        "What's a paper?"

        Surprisingly there are still significant numbers of customers for local newsagents in my part of the UK.

        My neighbour gave up doing his regular paper round when he reached the age of 79. Now he only "fills in" when a youngster suddenly quits or is otherwise indisposed. That means he is often doing more than one round - especially in school holidays.

      2. allthecoolshortnamesweretaken Silver badge

        Re: "What's a paper?"

        Oh, they're all the rage now. Jeff Bezos bought one last year.

  5. Neil Barnes Silver badge
    Stop

    If you can't scratch a window with it

    it's not cash.

    And if it's not cash, you shouldn't, in most cases, be spending it.

    Swipe this/tap that/toch the other is all about persuading money to leave you without you realising it, as pointed out in the article.

    1. SkippyBing Silver badge

      Re: If you can't scratch a window with it

      Not a fan of the new £5 note then?

      1. Anonymous Coward
        Anonymous Coward

        Re: If you can't scratch a window with it

        But you can scratch *its* window...

  6. Robert D Bank
    Go

    Cashless society

    There is a general push toward a cashless society, has been for quite some time now. Supposedly this is to reduce crime and increase tax revenue, which is bollocks of course. The big corporations still manage it without using cash.

    There are some real pitfalls to not having cash:

    - if the Gov't decides to 'bail in' some of your money (as happened in Cyprus) then you have no way to avoid it.

    - there will be no privacy in any transaction. This is not about paranoia that your partner will know you've been to the pub every lunch time this week. It's the fact that Gov't and other institutions will know what you've been doing most of the time. This has implications for things like insurance and eligibility for credit and so forth, especially when the information has been hacked or leaked.

    - what happens when you have a disaster situation like a tsunami or earthquake, when all telecoms are down and power supplies fail?

    - it doesn't work well for the poorest in society, or those who can't cope with technology such as the elderly or who have mental health issues. Many people don't even have bank accounts (or phones), so how do you give the £5 to the poor bastard living on the street?

    1. Paul Crawford Silver badge

      Re: Cashless society

      This =>

      I would up-vote you many times if I could!

    2. Anonymous Coward
      Anonymous Coward

      Re: Cashless society

      "so how do you give the £5 to the poor bastard living on the street?"

      If you're a Cambridge Tory student, you most likely just burn your mobile phone instead.

      1. Richard Jones 1
        Happy

        Re: Cashless society

        @Lost all faith, only if you are a relation of that woman north of the border.

    3. CaptSmegHead

      Re: Cashless society

      In that event, people will revert to the tried-and-tested barter system.

      1. Anonymous Coward
        Anonymous Coward

        Re: Cashless society

        "In that event, people will revert to the tried-and-tested barter system."

        I'm not sure they've moved beyond the potato as the standard unit of currency around here...

    4. Doctor Syntax Silver badge

      Re: Cashless society

      "There are some real pitfalls to not having cash:

      - if the Gov't decides to 'bail in' some of your money (as happened in Cyprus) then you have no way to avoid it."

      And the pitfall to having cash: the government decides to demonetize it as happened in India. Whatever you do the government will find a way to screw you.

      "those who can't cope with technology such as the elderly"

      Ageism. The Politically Mandatory ism.

      1. Tom 38 Silver badge

        Re: Cashless society

        - if the Gov't decides to 'bail in' some of your money (as happened in Cyprus) then you have no way to avoid it."

        Deluded if you think that the government can't give you a haircut even if everything is physical currency.

    5. Anonymous Coward
      Anonymous Coward

      Re: Cashless society

      There are some real pitfalls to not having cash:

      - if the Gov't decides to 'bail in' some of your money (as happened in Cyprus) then you have no way to avoid it.

      The true cashless society will result in more people holding silver or gold. The value of the intermediary medium relies on the faith people place with it. If society thinks the Government will fuck them over then they'll likely move themselves back onto a Gold Standard all on their own. We've had money printing and Brexit fears meaning the £5 note is now worth about £3 in buying power. Switch to cashless and/or a bail-in and it'll be worth fuck all.

  7. Haku

    All just numbers on a screen...

    "...everything is amazing right now and nobody is happy..."

    "...and then when you ran out of money you just go well I can't do any more things now..."

    -- Louis CK

    I'm of the "if I don't have the money I'm not buying it on credit" mindset which is why I don't have any debts and have trouble understanding people who have the means to live debt free but are in continual debt through loans &/or not paying off their credit card statement each month fully through their own choice of wanting to live beyond their means.

    I like paying for things in cash whenever I can because it's a tangible form of money that gives me a sense of how much I've spent and how much I have left, rather than looking at numbers on a screen that aren't always as up to date as the physical money in your wallet.

    Maybe I'm just getting old, the few grey hairs in my beard are suggesting this too...

  8. The Mole

    The author seems to make the mistake in assuming just because in the western world paying by phone is done by connecting it to credit card that that is the way it is done everywhere. Africa and other parts of the developing world have already set up systems where the banking is done just through a feature phone and have had massive use.

    1. Mike VandeVelde
      Boffin

      cash

      Here in Canada we have the Interac system for debit cards, it's a non-profit association of financial institutions, and cash lost the war like back in the 1900s. Every corner store / thrift shop takes them, every pizza delivery guy carries a mobile reader. Cash is still accepted everywhere, but Interac debit cards are ubiquitous and dominant. I don't think credit cards are used the in same way here because of the fact that Interac exists which is just all around better. I think Interac rivals universal health care for importance and I'm surprised I don't hear more about it. We just take it for granted and nobody else really cares what Canada is up to. If you want to see what a cashless society could look like then look into Canada.

      1. Tom 38 Silver badge

        Re: cash

        I think Interac rivals universal health care for importance and I'm surprised I don't hear more about it. We just take it for granted and nobody else really cares what Canada is up to. If you want to see what a cashless society could look like then look into Canada.

        Apparently this is because Canadian banks don't tend to issue regular Visa/Mastercard debit cards unlike most of the rest of the world. In Europe, (virtually) everyone with a current account will have either a Visa Debit (Delta) card or a Maestro card with similar ubiquity.

        1. kiwimuso

          Re: cash

          Interesting technology the rest of the world seems to have.

          Here in lil' ol' New Zealand I have a single card which is not only a credit card, but is a debit card if I so choose, as well. Any EFTPOS transactions show up up on my account virtually instantaneously, therefore my phone app ALWAYS shows the correct balance.

          Having said that, I get really pissed off with the apparently new current fad of asking if I want my receipt, or getting even more common, not even bothering asking. I just stand there with my hand out, waiting.

          Any silly sod who does not take their receipts in order to reconcile their bank accounts are just a scam victim in waiting. I have detected several instances of charges being made to my accounts, credit card or current account which I have not authorised (or forgotten about). At least I have caught up with it fairly quickly.

          Makes me wonder whether any of them actually check their accounts at all.

  9. Anonymous Coward
    Anonymous Coward

    Often consumers are strong-armed....

    ....into using Cards or shoddy e-cash like Paypal, but it isn't out of choice. So this might skew the stats a little, if they're even credible... Because there's always an agenda to get people to give up on cash like giving up on online privacy etc. So breakdown by age & country would be interesting to see...

  10. Anonymous Coward
    Anonymous Coward

    Kids these days .... will mount bankster's severed heads on traitors gate, once they work out what's been done with their future.

    1. DropBear Silver badge
      Trollface

      Wouldn't Poke-Go's need to stop spawning before they get around to that part though...?

  11. Anonymous Coward
    Anonymous Coward

    Is there any great change from our point of view?

    > as money disappears, it’s increasingly difficult for us to track where it’s going.

    >All of those subscriptions, app purchases, taps, waves, Ubers and god-knows-what-else

    > hit our bank accounts 24x7, and we don’t really have any way to make a good accounting

    >of where that’s all going, when, why, and to whom.

    Did we ever? If you had a bunch of cash and weren't diligent about keeping receipts as you spent it then you relied on memory to keep track of it - and couldn't vouch for any move that money made after the first transaction - seems it is the same now.

    The system the money is in however can keep perfect track if it chooses to so we might still not remember what we spent our money on but our bank, and who knows which other agencies, would be able to tell us.

    The change with the move away from cash isn't that we can no longer keep track of our money, it's that others *can*.

    1. Haku

      Re: Is there any great change from our point of view?

      It's almost like we need a VPN service for electronic money so 'they' can't track what we're spending it on.......Bitcoin?

      1. Sorry that handle is already taken. Silver badge

        Re: Is there any great change from our point of view?

        If everyone alive today tried to use bitcoin, on average each person would get one transaction every ~90 years, and the blockchain would increase in size by ~4.5TB. Little bit of a problem there that nobody's worked out the solution to without reverting to traditional (i.e. existing) methods of banking and exchange.

    2. Prst. V.Jeltz Silver badge

      Re: Is there any great change from our point of view?

      Good point AC , contrary to the authors opinion, all this elctronic blah blah comes with a built in list of what you spent where, completely the opposite of cash.

      If you cant learn to control your impulse spending when you get a list every month of what went where you are beyond help.

      1. Ledswinger Silver badge

        Re: Is there any great change from our point of view?

        If you cant learn to control your impulse spending when you get a list every month of what went where you are beyond help.

        Well, the evidence of maxed out credit card debt in both UK and US, where each month people get a list of what they've spent with whom, and still accrue debts they can't repay would suggest that a very large number of people are beyond help.

      2. Tom 38 Silver badge

        Re: Is there any great change from our point of view?

        If you cant learn to control your impulse spending when you get a list every month of what went where you are beyond help.

        When you get your monthly summary it is can be already too late. You can only use that to inform on your future spending in the next month, it doesn't do anything to stop you spending too much this month.

        In the past, I used to take out £60 cash on Monday morning; this was my discretionary spending to buy things like drinks, meals out, lunch, the occasional private eye - anything that wasn't home food, rent, power etc. With this system it was impossible to overspend on my discretionary needs; if on Thursday I'd already spent everything, you can't go big on Friday night.

        Compare to nowadays, we just tap a card on a reader to buy a round of drinks... I have had several nights when I've spent WAY too much at the bar and only realised a week or so later. If I'd had to walk out the bar to find a beer* token vending machine, I'd probably have gone home instead.

  12. Anonymous Coward
    Anonymous Coward

    I dont check my bank statements often. Too Lazy. When i do it seems in order. (must check more i guess)

    I like to think I am exceptionally well trained about knowing what I can afford - i dont have to "calculate" wether i can afford something as poster #2 does, i know - it stems from being able to afford nothing and building from there.

    I know that: I dont buy posh looking coffee jars or bacon thats not " 2 for x" , or the fancy petrol , or eat out anywhere where that costs more than wetherspoons.

    Dont buy furniture - just wait for the people who did buy furniture to want to get rid the the (inexpliccably perfectly serviceable) old stuff. (same with cars)

    Carry on in that vain and you'll soon pay your house off - provided you chose your house with the same mindset, and not the "ooh look the absolute max we could borrow is $$$$ , lets do that"

    1. Anonymous Coward
      Anonymous Coward

      "[...] or bacon thats not " 2 for x" [...]"

      Except sometimes the offer proves to be more expensive than buying a different package of the same brand. You need your mental wits about you - or even a calculator - if you are trying for economy.

      You also have to check your till receipt to make sure they charged the expected price. See article on Tesco offers.

    2. Anonymous Coward
      Anonymous Coward

      "provided you chose your house with the same mindset, and not the "ooh look the absolute max we could borrow is $$$$ , lets do that"

      The 2008 financial crisis was attributed to easy credit. The solution apparently was to make even more money available as cheap credit.

      Instead of maxing out my mortgage capability over the years - I was prudent and saved instead. Now my large nest egg isn't anywhere near enough to make up the difference between the house I have - and the house I could have had.

      The UK housing market has become another "too big to fail" bubble supported by the government.

      1. Prst. V.Jeltz Silver badge

        " the house I have - and the house I could have had."

        Well at least you can rest easy that you wern't part of the mass greed / debt goldrush that now means none of the kiddies can afford houses.

        1. Anonymous Coward
          Anonymous Coward

          "[...] that now means none of the kiddies can afford houses."

          Having no offspring I would like to leave my house to a deserving young friend who would raise a family in it and appreciate it.

          Unfortunately the house price bubble has pushed its "location value" over the threshold for UK inheritance tax. That means I have to try to make sure there is enough surplus cash in my estate to pay the tax.

          Otherwise it is the sort of property that would be snapped up and subdivided into multiple occupancy rentals by the landlords who are gradually buying up the street. One across the road was being converted this week. The number of beds that were delivered was ridiculous.

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