The math of money, which has been lost on younger generations, should be of concern to condo communities.
A Federal Reserve Bank survey found 12 percent of consumers didn’t pay with cash at all in 2017. A 2018 Pew Research Center survey found 29 percent made no cash purchases during a typical week. The migration to cashless transactions among younger generations is quickening.
There is a disconnect between how paper currency turns into purchasing of goods and services because virtually everything is purchased online or with an electronic payment. Condo boards lacking financial discipline instilled by paper currency and responsible for dramatically larger transactions are at risk of making unwise choices.
Managing money is harder when it is no longer something that can be seen and held. Children and teens no longer know what to do with money simply because they are not used to it.
Today’s kids have grown up with digital or electronic money. Any cash they receive is quickly deposited to an account so it can be used in electronic form. The account is linked to a debit card providing access to their money and linked to an app showing the balance.
Retailers became aware of this problem earlier than most. After holidays they see kids coming in with paper money and unsure how to use it. It is something they rarely see or carry. Basics such as counting money and change are lost on them. Gift cards are easier for kids to understand. Even Monopoly has adapted by offering a cashless version of the game. Monopoly Ultimate Banking Edition replaces paper money with a bank card.
The challenge with cards is the lack of an immediate sacrifice. You don’t see less money in your hand or the immediate result of miscounting your change. The fact that you now have less money is not visibly apparent as it is with physical cash.
Today’s electronic payment options include credit and debit cards, online transfers, mobile wallets, apps and wearable payment devices. Kids rely on preloaded cards to pay for food in school lunch lines or the cafeteria. When shopping and a gift or debit card runs out of money they ask parents to put more money on the card.
In a surprising twist credit cards, initially viewed as a way to simplify payments, are now seen as a way for borrowing on credit.
Condo boards lacking the financial discipline instilled by paper money is something condo communities should strive to avoid.