I remember getting my allowance as a child. There was something so satisfying about tucking crisp bills into my wallet. The tangibility of the currency made it feel so meaningful. And typically, when I was receiving money from my parents, it meant I had completed something or achieved something. These tokens were my reward for a job well done. These moments—touching and feeling the currency—made me feel proud.
The shift: from physical to digital
Now that we live in a mostly cashless society, where transactions are made in swipes or taps, I often wonder: does money hold less meaning? The ease of online shopping, instant transfers, and virtual wallets have revolutionized our spending habits. Of course, these make life more convenient, but are we becoming too detached from the real essence of money? With purchases just a click away, the deliberation and weight of the transfer seem somewhat diminished. “So what does it matter?” you might ask. And to this I say, “Does our detachment from the transaction lead to frivolous spending?”
Navigating the digital financial landscape
With online investment accounts, digital graphs and figures change rapidly, leading to frequent second-guessing of financial choices. Handling physical cash gives a tangible sense of trading value. Conversely, digital statements, lacking this tangibility, encourage a more objective view. Without the emotional impact of physical transactions, investors can view their finances holistically, understanding that fluctuations might be temporary. For those growing up in a cashless society, grasping the real value of digital money becomes a complex task. How do we convey the significance of a digital dollar?
Adapting financial education for the digital age
Without actual bills changing hands, new methods of instilling financial responsibility must emerge. So how do we do it?
Perhaps by using tools that mimic the responsibilities and consequences of monetary decisions. Digital apps and visual tools can be great for tracking spending, saving, and investments, seemingly making it a bit more real.
However, it’s escalating the conversations about money that is really going to be most critical. We have to have earnest conversations about earning, saving, spending, and investing. They need to be frequent, emphasizing the intangible aspects of money – like the time, effort, and sacrifice behind each digital unit.
Integrating values and wealth
Beyond the benefit of teaching our children (and their children) about real money relationships, financial conversations give us a chance to connect our values with money.
If you would like help in intergenerational wealth transfer and helping your children understand the value of money, call the office (02-624-2788).
We can guide you through the legacy planning process, ensuring your children and grandchildren are ready to become great stewards of your family wealth.
Douglas Goldstein, CFP®, GFP®, is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published November 14, 2023.