Study Shows 1 in 6 Kids Receive Digital Money from Santa Claus
Is Santa going cashless?
A new study about children and money finds one in six kids receive digital payments from Santa instead of cash.
Over 2,000 parents were asked, “What traditional things are you taking digital?” The most popular response was birthday money, with 41% of parents saying they deposit money directly into their children’s accounts. Money from Santa was the second highest response at 17%, followed by money from the Tooth Fairy at 13%.
The 2019 Parents, Kids & Money Survey from T. Rowe Price revealed that 54% of children (ages 8 to 14) have a savings account, and 19% have a checking account. Moreover, 17% of preteens now have a credit card. Parents are adding their children as authorized users to their credit card accounts to help them build credit before they turn 18.
Digital transfers from Santa may be convenient, but they aren’t always ideal. In order for children to grasp the value of money, they need to first see tangible evidence of it. If they have cash in hand, they can see it dwindle with each transaction. If the money is on a card or in a digital account, they may not assign it the same value.
If you are planning a direct deposit for your child’s Christmas present, make sure it is age appropriate. Use this as a tool to teach your child how to budget and save money, and explain the consequences of poor money management. If your child is not old enough to understand these concepts, you may want to ask Santa to send cash or a physical gift instead.