Will the next generation understand the value of money as we move toward a cashless society?

As society progresses it becomes more and more evident that we heavily rely on technology, especially when managing our finances. Analysts have predicted that within the next five to ten years’ we could become a totally cashless society.

Are we moving towards a cashless society?

It seems obvious when you think about it, with technologies like Pay Pass, Pay Wave and all things tap-and-go, studies show we are using ATMs less and less. The question remains, will having cash in our pockets soon be a thing of the past? What will happen to the next generation in this shift from plastic to digital?

Millennials are already seeing the effects growing up in a society that has traded piggie banks for digital banks, gold coins for crypto-currencies, and the generation after them could see a society even less dependent on physical money.

A national survey conducted by the Royal Australian Mint has found parents are concerned society will become completely cashless within the next ten years, leaving the valuable lesson of money management lost somewhere in cyber-space.

According to the study:

  • 67% of Australian parents worry that moving to mobile and card payments could hinder their child’s ability to understand the value of money
  • New Mums were more concerned than Dads, with 70% of Mums surveyed showing concern, compared to 63% of new Dads
  • One of the main concerns parents have is about their children's ability to learn how to save, with 57% of parents fearing a lack of contact with physical money could make it challenging.
  • 67% also said they worry money could become an abstract concept for children in the future.

Father of four, 29-year-old Mathew Leach works in the banking sector and understands the struggle of explaining the value of money to his young children.

“The eldest who is a boy and the 5-year-old have trouble saving money as they are very impulsive with their pocket money.

The girl who is 8 has more of an understanding and appreciation of money and spends it wisely,” Mr Leach said.

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Matthew Leach walking with his son Henry

Mr Leach says he too had trouble saving money growing up as a teen and sometimes still faces that difficulty. He's made sure his kids don’t have the same troubles.

“I’ve set up a few trust fund accounts to save funds for the little ones and have taught them how money works and the importance of earning your own money, and all work is honourable and not to look down on people who don’t work in undesirable jobs.” Mr Leach said.

He also worries that his kids might be at risk in the future, with the fraud becomming more and more prevalent.

Does having physical money affect how we value it?

Many parents like Mr Leach feel an inability to help their children understand the value of money with it being less and less common as time goes by, fearing their kids might not ever use money with the rise of digital banks future technologies.

But, could there be an effective way to prevent a total disconnect ?

Child Psychologist Andrew Greenfield has been working with families and children for over 20 years and has seen how parental challenges have had to evolve with technology.

He believes exposing young children to coin collecting could help re-connect children to physical money.

“Like the research shows, tech is often one of the biggest parental challenges today and I welcome [coin collecting] initiatives to encourage children and their families to engage with each other offline,” Mr Greenfield said.

One factor that concerns Mr Greenfield in younger kids, is the inability to learn the value of money if they can’t see it.

“It’s a little concerning because they don’t know how much things cost if they don’t frequently use and see money, and they don’t worry about it because that thought process isn’t there,” He said.

While the lack of money won’t have major psychological effects on children according to Mr Greenfield, learning the value of what things cost and having the responsibility will help kids understand how to handle money in the future.

Collecting coins can help the younger generation better value money

CEO of the Royal Australian Mint, Ross MacDiarmid believes coin collecting could bring back the value of money to the younger generation.

“The poll findings demonstrate the importance of collecting and saving coins for the financial literacy of Australia’s young people,” said Mr MacDiarmid

Mr Greenfield agrees, adding that coin collecting can help parents begin the conversation.

“What we often refer to as ‘quiet play’ or ‘old-fashioned play’, like collecting coins, is an excellent way to help children develop important skills like patience and persistence." Mr Greenfield said.

The Royal Australian Mint has launched the nation’s first ever coin hunt, Australia’s Dollar Discovery. The initiative was designed to help encourage parents and kids to better engage with coins.

The hunt encourages people to find the treasure, which consists of Australian $1 coins marked with either the letter A, U or S released into circulation.

Australian Mint CEO says the initiative comes at a crucial time.

“At a time of growing ‘intangibility’, the Mint is delighted to have launched a program that encourages a whole new generation of collectors both young and old, who will not only collect these coins but also be reminded of the value of a dollar,” Said Mr MacDiarmid

Coin collecting
Australia’s Dollar Discovery, dollardiscovery.com.au.

As we peddle faster toward are more technologically determined society, many still value the importance of keeping their finances tangible, while others move toward adopting a digital and cashless system.

What has become evident is the importance of the next generation understanding and valuing money. One way to do this is by starting young, and familiarising children with the value of money in its physical form.

Whether it’s through coin-collecting or having a conversation with your children about responsible spending, it’s evident that there’s an important lesson to for the next generation of spenders.

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