Our society is becoming increasingly cashless, and the latest casualty of this war on cash and coins could be the trusty piggy bank.
Could this be the end of pocket money as we know it? Here’s why parents are deciding to reward children with digital pounds instead of physical money to pop in a cute four-legged container.
[top_pitch]
What’s going on with children’s finances?
Research from finder.com offers some interesting insights into the world of children’s finances. According to their data:
- 61% of 10-15-year-olds use an app to manage their money.
- 64% of kids want to learn about money from their app provider.
- 72% have been given money advice from their parents.
- 22% have been taught about managing money by their school.
This paints an interesting picture of the financial youth. A key theme seems to be a lack of proper financial education provided by schools. Luckily, parents are picking up the slack and passing on what they’ve learnt. Well done Mum and Dad!
Why is pocket money going digital?
Everything is becoming more reliant on digital tools these days. You probably do most of your money-managing using websites and apps. So it’s no surprise that the tech-savvy youth are doing the same.
New children’s accounts and apps also make it easier than ever for parents to put cash on a debit card for their kids.
Not only can this be safer because they’re not running around flashing cash it also gives parents direct visibility and control over their children’s spending.
[middle_pitch]
Is this lack of cash a good thing for young savers?
There’s still something to be said for holding physical money in your hands. It’s a real representation of your wealth that you just don’t quite get from numbers on a screen.
Young savers are likely to be extremely comfortable in the digital world. But humans are physical creatures, and when we’re young, we do a lot of our learning through touch and feel.
So removing this physical sense from the act of saving could have one of two impacts:
- Young savers become detached from the value of money because it’s something they can’t hold or touch, it’s just digits on a screen.
- This detachment makes it easier for them to be less emotional about their savings, meaning less effort is made to build good habits. The convenience also means saving accounts can be kept out of sight and there’s less temptation to smash open the piggy bank!
Final thoughts
The end of the physical piggy bank may be just around the corner, but this isn’t necessarily a bad thing. What’s more important than whether kids save physically or digitally is making sure they learn about finance.
It’s the ability of parents and schools to teach children about finance that’s going to have the biggest impact. Learning the importance of saving and practising the act will be a vital lesson for young people.
Most adults manage their money digitally. So perhaps it’s only fitting that kids also get some practice doing it this way. Piggy banks are cute, but once children reach adulthood, they’re not going to crack open jars and use shrapnel for their wants and needs. Digital pocket money might give them a better taste of what it will actually be like managing their own money as they grow up.
