Lessons about money uses to start with physical cash: such as earning pocket money, saving coins in a piggy bank, and handing over notes at a shop.

Today children observe adults making payments by tapping a card or phone, which makes money feel “invisible” and free. This digital shift offers new opportunities while presenting challenges in helping children understand the value of money and the concept of budgeting and saving.

Here are some pros and cons of a cashless society.

Pros

• Convenience and speed. Digital payments make transactions quick and easy in a tech-driven world.
• Better tracking and budgeting. Apps and online banking tools allow young people to monitor spending, set savings goals, and track where their money goes in real time. This makes the transition to investing apps and advanced money management easier.
• Security and fraud protection. Unlike cash, which can be lost or stolen, digital payments are more secure, with bank protection and fraud detection improving all the time.
• Encourages saving with automation – Many apps allow users to round up transactions or set automatic savings, helping young people build healthy financial habits without much effort.

Cons

• Less awareness of spending. Without physical cash, it is easier to lose track of spending. Swiping a card or tapping a phone doesn’t create the same sense of loss as handing over cash.
• Limited understanding of budgeting basics. Handling physical money teaches key lessons about budgeting, such as counting money, saving change, and physically setting aside cash for different needs.
• Increased risk of impulse spending. The ease of contactless payments and “buy now, pay later” services can lead to poor spending habits, debt accumulation, and a lack of financial discipline.
• Vulnerability to digital fraud.Young people may be more susceptible to online scams, phishing attacks, and data breaches, especially if they don’t fully understand cybersecurity risks.

But there are ways to overcome these challenges. It’s important to teach young people to check their balances regularly – encourage them to review their spending history in their banking app as often as they would count physical cash.

Use budgeting and savings apps – sorted NZ, PocketSmith, and banking apps such as ASB’s Save the Change can help young Kiwis visualise their finances.

Set digital allowances: parents can transfer a set amount into a child’s account weekly or monthly to encourage budgeting without relying on cash.

And introduce pre-paid debit cards: Mymo or Spriggy enable young people to practice digital spending within set limits, helping them learn money management before having full access to bank accounts.

Helping children transition into adulthood isn’t just about life skills like cooking or driving. It is about ensuring they can confidently navigate their own financial future.

While parents may be financially astute, many young adults enter the workforce without understanding credit scores, loans, KiwiSaver, or retirement planning. They can make costly financial mistakes that impact their long-term security without guidance and may see them returning to the bank of mum and dad.

Parents can ensure their next generation is prepared for financial success by equipping children with financial independence strategies early on. Teaching them about money in the digital age is a great starting point.

Bridgette Jackson is a CDC-certified Divorce/Separation Coach with a postgraduate dispute resolution qualification. She is also a trained divorce mediator (AIMNZ), a Relationship Coach (Institute for Life Coach Training), and a member of the Institute of Executive Coaching and Leadership (accredited by the ICF - International Coaching Federation). Bridgette is also a Certified Organisational Coach, Level One with IECL (Institute of Executive and Leadership Coaching) and an enrolled barrister and solicitor of the High Court of New Zealand.