Why ditching cash can be bad for children

The decline in using cash, exacerbated by the COVID-19 pandemic, could have a long-term negative impact on children, experts warn. But there are simple things parents can do to help.

OUR cashless society means children don’t understand the value of money and experts fear it’s a problem that will be exacerbated by the COVID-19 ban on handling cash, unless parents start teaching them with coins.

It comes amid the COVID-19 pandemic, which hurled businesses into chaos and saw owners refusing bank notes and coins over the risk of transmitting the deadly virus.

Businesses are able to refuse the legal tender, as long as they have made the conditions clear before payment, according to the Reserve Bank of Australia.

University of Southern Queensland mathematics curriculum lecturer Melissa Fanshawe said children can’t understand the value of money unless they touch, play and use it to purchase items.

Ms Fanshawe said it “really is a problem” that students think a 50 cent piece has more value than a $2 coin because it’s larger.

“That’s a very common misunderstanding for children. We have to spend a long time with them in classrooms trying to fix that,” she said.

“If they’re just tapping their parents’ credit card or tapping their (Apple) watch to buy things, they don’t really understand what it is and how much it is, and that is going to have long-term effects when they do their own budgeting as well as an adult.

“We need to be really mindful that in a safe way, children need to be able to touch, play and explore with money and use it to buy things so that they know how much it is,” Ms Fanshawe said.

Natalie Haddock and daughter Audrey, with toys the four-year-old has bought with cash. Picture: Richard Walker

As the use of cash declines, children aren’t comprehending the value of money, University of Western Sydney Associate Professor Catherine Attard said.

“We probably can’t stop it, but we do need to be aware that there are implications, and teachers and parents still need to be using cash with their children to teach them what the abstract concept of money really means.

“I think we do need to make sure we focus on children’s … financial literacy, from the early years not just in ­secondary school when they’re getting jobs, we want to develop habits in children as soon as we can.”

Natalie Haddock said that she saved any notes or coins so that her daughter could use them to pay for items when they were shopping or dining out to teach her the value of money.

“She doesn’t yet understand how much it is (worth), but she knows how many coins she has and how many she will lose,” she said.