Raising Money-Smart Kids in a Digital World
Gone are the days when pocket money came in actual coins and kids learned about money by physically handling it. Today’s children are growing up in a world where transactions happen with a tap, swipe, or click – making money feel increasingly abstract. As parents and carers, how do we teach financial literacy when cash is becoming as rare as a phone box?
The Digital Money Challenge
The shift to digital payments has created a unique challenge for parents and carers. When children see us paying with contactless cards or our phones, money can seem limitless and magical. There’s no visible exchange of physical cash, no counting out coins, and no obvious moment when the money “runs out.” This disconnect makes it harder for young minds to grasp the concept that money is finite and must be earned.
Research suggests that children who grow up without handling physical money often struggle more with budgeting and understanding the value of purchases. The psychological impact of handing over cash – that slight sting of seeing your wallet get lighter – simply doesn’t exist in the digital world.
Start with the Basics (Yes, Even in 2025)
Despite living in a digital age, fundamental money lessons remain unchanged. Children need to understand that money comes from work, that spending choices have consequences, and that saving takes patience. The delivery method might be different, but these core concepts are timeless.
Consider giving younger children a small amount of physical cash for their pocket money, even if it’s just a pound or two. Let them feel the weight of coins, count them out, and physically hand money over when making purchases. This tactile experience helps cement the connection between money and value.
Embrace Child-Friendly Digital Tools
Rather than fighting the digital tide, embrace it with age-appropriate tools. Several UK banks offer children’s accounts with accompanying apps that let kids track their spending and savings in real-time. These visual representations can be incredibly powerful – showing money going up when pocket money arrives and down when they make purchases.
Many families are finding success with prepaid cards designed for children. These allow kids to experience digital payments while maintaining parental oversight and spending limits. The key is choosing tools that make money visible rather than invisible. If you are a foster carer with an agency like Foster Care Associates though, you will need to speak with your social worker before opening a bank account for the child in your care.
Make It Real and Relevant
Connect digital concepts to real-world experiences. When your child wants the latest game or gadget, help them understand the cost in terms they can relate to. “That new game costs the same as four weeks of pocket money” is more meaningful than just stating the price.
Involve children in family financial discussions appropriate to their age. Explain why you’re comparing prices at different shops, why you might choose one brand over another, or why a family holiday requires months of planning and saving.
Teaching Digital Safety
Financial literacy in the digital age must include online safety. Children need to understand concepts like in-app purchases, subscription traps, and the importance of never sharing financial information online. Make these conversations ongoing rather than one-off lectures.
The goal isn’t to make children fear technology, but to help them become savvy digital consumers who understand the real-world implications of their online financial choices.
Money-smart kids aren’t born – they’re taught through consistent, age-appropriate conversations and experiences that evolve with our changing world.
