A pile of coins that signifies that cash is more tangible for children than digital money.
Financial Literacy

Is Cash King?

Back in the day, you could virtually only pay with cash and shop during store opening hours. Cards, cell phones, and online banking now enable 24/7 spending. Should cash even be part of financial education? Daniel Betschart of Pro Juventute answers this question in his column.

Creating the Basic Understanding with Cash

Young children understand things best when they can see and touch them. For abstract topics like money, this works particularly well with cash. With coins and banknotes, you can clearly show your child that you get varying quantities depending on the amount. It is clear that money is not infinite. If your child spends their two-franc coin, the money is gone. Through its properties, cash can have a direct influence on consumer behavior and the handling of money. Parents are an important role model. If you use cash for payments, your child can understand that it is a means of exchange and that you receive goods in return.

If you use cash for payments, your child can understand that it is a means of exchange.

Daniel Betschart, Pro Juventute

Developing the Understanding of "Invisible Money"

With card payments, this is less clear, since only the goods change hands. The cash flow, however, remains invisible. Which is exactly why parents should explain and accompany electronic payment instruments more.

For example, grocery shopping at the supermarket. This is often where children come into contact with money for the first time. From the point of view of the child, in the supermarket, different things are placed in the shopping cart, and at the end Mom or Dad holds a card to the payment terminal and everything is put into bags. It is not visible that the groceries cost money. Therefore, make the function of the card clear to your child.

Showing the Connection between ATM, Account, and Assets

If you are with your child at the ATM, they see the card disappear into a slot and money come out. Take the situation as an opportunity to explain that, with the card and the PIN, you are accessing your account and withdrawing money from it. Also point out that you only have a limited amount of it, and that you have to work for it. This may be complex and not easy to understand, but is important for the child to form a better understanding of money.

Explain that, with the card, you are accessing your account and withdrawing money from it.

Daniel Betschart, Pro Juventute

Providing Space for Own Experiences

With both cash and digital money, it is helpful if children can experience something themselves. Maestro cards for children can therefore be a good tool to explain the system more clearly to them and teach them how to handle money in a fun way. After all, cashless payments also have their advantages. For instance, the income and expenses can be clearly traced and displayed, even long after a purchase. This can give the child a better overview and even encourage them to save more.

What Is the Right Approach?

Electronic transactions require a certain maturity and the necessary interest to understand the principle of a card payment. It is therefore recommended to first explain to younger children how to handle cash. You can take the next step with older children and let them experience paying with a card.

A column by Daniel Betschart