Cash, Credit, or Debit?

“Why does everything at this school cost money?” said DJ Cat, clutching her head in frustration.

I was selling chocolate chip cookies at school as a fundraiser for the Cooking Corporation. Lucky for me, it was hard for anyone to resist the aroma of freshly baked cookies, and the school meeting members who didn’t have cash in their pockets were lining up to sign IOU forms.

Shortly after her frustrated statement, DJ Cat was reminded that actually, everything everywhere costs money, not just in this school. Then several people in the room struck up a conversation about how even things that seem free (lemons from a backyard tree) actually do cost money (rent). From one critically thinking student: “Even hugs aren’t free, because someone had to go to a hospital to be born.”

At The Open School, we don’t shy away from teaching students how money works. We accomplish this by forgetting, to the best of our ability, the fact that we’re in a school and not in the real world. Thus everything costs money; the students are responsible for their own money; and they can pay in any of the ways adults can pay for things.


Parker brought a twenty dollar bill on a field trip to Legoland, California. The money was probably intended for lunch, but with twenty you will obviously have some left over for other things. The first thing we did when we got to Legoland was peek inside the “Big Shop,” a sort of hybrid gift shop / toy store. Parker took one look at the merchandise and then decided we should come back at the end of the day so we wouldn’t have to carry around a big lego set all day.

At lunchtime we found a pizza vendor who was selling personal pizzas for $9. I decided to buy one, but $9 was too expensive for Parker. He wanted to buy a lego set from the shop for $18.73, which meant he only had $1.27 to spend on lunch. After scouring the menu for something cheaper that would satisfy his hunger (and not finding anything), Parker spent the next ten minutes bartering with me for a discounted slice of my pizza. He finally got me to agree to sell him a slice of pepperoni and two pieces of sausage for a dollar.

Granted, everything is more expensive in a theme park. Nonetheless, most kids have the everyday experience that their parents pay for everyday expenses, and the kids don’t have to think about it. At The Open School, students are in charge of their own money. They learn very quickly how much things cost, and they very quickly develop a frugal mentality.


One of the major pains about paying with cash is that you have to carry cash around everywhere. Fortunately, as long as you have a governing body that can enforce contracts, people can pay each other in promises instead of bills and coins.

At The Open School, we have these handy IOU forms:

A school meeting member can lend another school meeting member cash in exchange for one of these forms, having confidence that if the money is not paid back in a timely fashion, the Civics Board will bring justice to bear on the debtor.

In practice, IOUs are mostly issued by corporations during fundraisers. This is great for corporations because they get more sales after removing the pesky obstacle of customers actually needing to have money. (Sure it’s diabolical, but the profits always go back into the school to buy more cool stuff, like cooking equipment.) It’s also great for students because they get to learn about the real-world dangers of paying for things on credit.

As much as staff use the structures of the school for their own ends, every student has the same powers: they can hold their own fundraisers and issue their own IOUs with no more red tape than is necessary for anything else they do. Once again, students at our school are learning how real money works and getting practice for living real life.


The final way students can pay at The Open School is using a thing called a “petty cash account.” Every student automatically has one of these accounts, but they can’t use it until their parents deposit some money. Once the account is funded, the student can write checks to pay for anything from fines to Cooking Corporation lunches.

While it’s useful for kids to learn how to count cash, the reality for most adults is that cash rarely crosses their minds. Modern transactions are digital, so how better to prepare kids for the real world than by allowing them to make digital transactions? But wait, let’s not forget the true reason for preferring debit accounts over cash: debit accounts are way more convenient. Students with accounts don’t need to remember to bring money for the lunch fundraiser. They don’t need to worry about accidentally leaving a five dollar bill on the table and losing it. (And they don’t need to flirt with danger by purchasing on credit.)

As usual, the goal of all this is to give students as much responsibility as possible within a safe, compassionate environment. This means that if a student overdraws her account, she’ll have to deal with the consequences (probably a fee). It also means that if a student gives out an IOU and borrows more money than he can pay back right away, he’ll have to make some interest payments. Finances are hard work — so is The Open School.

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