Children can understand money’s value even without cash

The study compares children aged 8–9 in Sweden and Austria, two countries where the use of cash differs significantly. In Sweden, we have quickly become one of the world leaders in cash-free payments, while the use of cash is increasing in Austria. At the same time, we know that many parents think it is difficult to teach children the value of money when we use less cash in society. Therefore, FI asked KTH to study whether there are any differences between Sweden and Austria in how children understand money. The results of the study show that the differences are small or non-existent.

"The earlier we can teach children about personal finances, the more tools we give them to avoid the pitfalls of the financial market later in life," says Therese Wieselqvist Ekman, who is responsible for financial education at FI. "There has been a concern about whether this is possible in a cashless society. The study shows that it is fully possible."

FI's experience from supervising financial firms is that many consumers experience problems or are taken advantage of on the financial market because they are not knowledgeable enough about personal finances. One way to counteract this is to start financial education early. The study shows that the absence of cash does not necessarily prevent parents from talking about and allowing children to experience the value of money.

"Personal finances are part of the school curriculum. But it is also important to talk about money at home," says Wieselqvist Ekman. "A weekly or monthly allowance is still a good idea. Using digital payment methods works just as well as if the children get to save bills and coins in their wallets."