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A cashless society will leave kids worse off, say Aussie parents

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Sixty-seven per cent of parents believe a cashless society will leave their children worse off.

More than half of parents think it is easy or very easy for children to misuse digital payments when compared to cash, according to new research from MyState Bank, while a third say their children have spent money without permission via digital services such as apps, in-app purchases, eBay, UberEats or downloading music and games.

"In Australia, we have had an extremely fast adoption of online technologies," says MyState Bank marketing manager Heather McGovern.

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"However, the overwhelming feeling from parents is that as money becomes less tangible, there is a need to help children understand the value of money and spend responsibly."

On a more positive note, 65% of parents say their children understand the concept of debt, 72% know about overspending and 90% have a grasp of what saving means.

"Our findings suggest that Australian parents are talking to their children about the basics of money management but that the need for financial education initiatives is increasing as we use cash less and less," Ms McGovern said.

Still, more work is needed. A recent PISA assessment showed one in five Australian 15-year-olds is falling behind international standards for financial literacy.

"While dynamic fin-tech advancements provide convenience for some, many are being left behind because they cannot afford various technologies or perhaps lack the digital literacy required to navigate these safely and confidently," says Carly Sawatzki from Deakin University.

Education both in and out of the classroom is the remedy.

"We need to recognise teachers as professionals and engage them in thinking about ways to embed useful financial contexts - like invisible transactions, cashless society, and digital scams - in their lessons more routinely."

Encouraging children to take up STEM subjects (science, technology, engineering, and maths) is a good place to start. Sawatzki says there is a strong correlation between the modes of thinking developed in these subjects and financial literacy among 15-year-olds.

"Whether it is teaching a younger child how to save or budget or helping an older child to learn about wealth creation, it is important that we keep talking to young people about money so they can feel confident about the future."

Teaching kids about money starts at home, says Katrina McCarter, mum of three and founder and CEO of Marketing to Mums.

"As a parent I am conscious that my choice to use cards for payment rather than cash potentially reduces my teenagers understanding of money," she says.

"I choose to take my 14-year-old son on the weekly shopping trip with me. We have a set weekly shopping budget and my son has to ensure we keep within our limit.

"I also speak a lot about opportunity cost with my kids; choosing to do one thing, means we will have to miss out on something else. I get them involved in those decisions."

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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