Raising children digital but at what cost?

Technology has become an integral part of the world we live in today, and as a result, children are growing up digital. As much as it’s important to equip them with the necessary skills to adapt in a quick-transitioning society, what if we’re missing out on an even more important role – that of promoting a child’s learning ability?

Research conducted by University College London revealed how children ‘are unable to work out change’  because of the prevalence of card payments, the Daily Mail reports. In the study, researchers were left shocked when they discovered children’s lack of knowledge in handling moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More. Their findings during the class observations in primary and secondary schools revealed that half the class experienced ‘significant difficulty’ because they were ‘unfamiliar with the use of coins, different combinations of values, or of the notion of change’.

In Australia, the not-for-profit Financial Basics Foundation has concluded that students are also struggling with financial literacy. Results from a 2017 survey show that despite 85% believing that they have a good understanding of how credit works, their responses to some basic questions were off target. Over 50% are convinced that it takes only three years to pay off a $2,000 credit card debt at an 18% interest rate; when in reality, it would take over 15 years! Furthermore, one out of three respondents believes that there is “no interest charged on outstanding balances at the end of the interest-free period” (Kathy McLeish, ABC News). Even Natalie McClatchey, teacher of financial literacy at Mansfield Sate High School in Brisban, said that her own children believe groceries are free when they are paid with tap-and-go.

A growing number of countries have stressed that moving towards a digital-only society would affect us all – particularly the unbanked, underbanked and the elderly – but less attention has been given to how kids are adapting to a culture less inclined to using cash. It’s unfolding to be an alarming trend with children as young as three have parents replacing traditional pocket money with digital piggy banks, the Telegraph reports. While in the US, a quarter of its population belongs to the so-called Generation Z and are less familiar with cash, choosing to make purchases using credit cards. Donnel Briley, professor of marketing and behavioral psychology at Sydney University confirmed that “there’s good empirical evidence that people spend more money when they don’t actually have to use cashMoney in physical form such as banknotes and coins. More, and that goes across different alternative forms of paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More.”

In response to this growing concern, a British startup released a digital pocket money app which parents are turning to for their young children who can’t open a bank account. In China, teens can hold accounts through mobile payments such as Alipay and WeChat Pay while Hong Kong offers a kid-friendly version of its stored value Octopus card. Gone are the days of old-fashion piggy banks as globally, contactless payments are making its way into children’s pockets. As innovating as it may be, it still doesn’t negate the fact that the value of cash instills value in children. According to the Daily Management Review:

• Having concrete and real representation – in this case, cash – is necessary for the development of numeracy in children
• Cash carries a different, emotional meaning where bills and coins teach children responsibility and discipline
• Social skills can be developed around the use of cash, for example, when handing out spare changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More to a homeless person a child experiences empathy and learns to give
• Contactless payments alone can deprive children of important communication experiences such as when a child counts change at the cashierInitially, the person who is responsible for the safe, its opening and closing, and the contents that are safeguarded inside it. Nowadays, at a central bank, the person who is responsible for matters related to the treasury and cash. Their signature would usually appear alongside others on the banknotes issued by the bank. More and the seller waits patiently, confidence is learned
• Coins and banknotes help explain to children how money works and how society interacts
• Cash carries a deeper symbolic meaning in addition to its intrinsic, financial value

“How well we explain to our children the value of money and their role in society will affect our lives a few decades later – when they will be in charge of the financial system. And that is why it is worth thinking twice before fully rushing into a cashless society with our kids. And in addition to the educational value of cash, no bank transfer or contactless payment can match the joy we experienced as children when our grandmother or godfather slipped us a banknoteA banknote (or ‘bill’ as it is often referred to in the US) is a type of negotiable promissory note, issued by a bank or other licensed authority, payable to the bearer on demand. More in the pocket with a wink of the eye.”

Daily Management Review, 2019

This post is also available in: