Opinion  

Making the digital world add up

Kirsty Anderson

Kirsty Anderson

In a world of virtual money where many of us pay for everything on contactless cards and direct debits it can be hard to remember that real cash still exists.
 

Monthly spending on contactless cards is now more than £4.3 billion with more than 110 million in use across the UK. Paying for items worth less than £30 in cash now seems a bit quaint.

Adults can remember a time before digital money when we used cash and cheques. Using cash, of course, has not necessarily made us financially capable as regular research on how well we understand debt, mortgages, pensions and savings shows.

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Financial advisers at the frontline of financial education will be aware of the need to increase general financial capability.

However, it is tougher for children growing up now in a digital age struggling to understand the value of money and to become financially capable when their experience of paying in shops is seeing their parents tap a card on a machine.

Likewise online and “virtual” purchases – such as new avatars in a video game –  are made in a click of a button behind which the real money payment remains invisible to children. 

Prudential research underlines how this  can be made even harder as it found that around one in four primary school children have used parents’ cards to shop online and nearly one in five know their parents’ PINs.

The study found 16 per cent of parents allow seven-to-11-year olds to click and go in shops with their cards.

The way children use and understand money is changing fast. Parents and teachers need to work together and be given the tools to ensure the opportunities created by digital payment technology are accompanied by an understanding of the responsibilities that come with it.

There is an emerging digital problem for children in learning how to become a financially capable adult able to make complex decisions throughout life. 

Part of the solution to the digital divide is to embrace digital learning as Prudential is discovering through its free educational resource Cha-Ching in partnership with Young Money.

Cha-Ching is available online to families to learn together at home and help them discuss finance and money as well as in schools. 

Parents can probably benefit as much as children as research we have commissioned among parents of seven to 11-year-olds, children themselves and teachers demonstrates.

Their children may already be talking about it – the free resource aimed at seven to 11-year-olds in Key Stage 2 is being used in 650 schools and the feedback from teachers who are integrating it into lessons has been impressive.

The resource, which was developed with educational psychologists and first launched in Asia in 2011, is built around animated music videos based on six characters and how they earn, save, spend and donate.