| On 5 October Spain holds its annual Financial Education Day, this year under the motto “Save. Invest. Advance.”, with the Banco de España, the CNMV and the Ministry of Economy as promoters and a national final of the schools’ financial knowledge contest. Similar initiatives run across Europe, and the consensus behind them is that financial habits start early. Less discussed is the material through which children first meet money. For most of them it has been a coin or a note, and that experience is thinning out fastest precisely in the years when, according to developmental research, the foundations of later financial behaviour are laid. This note reviews what developmental psychology, education research and central bank studies say about the role of physical cash in that early learning. |
Where learning about money begins
The first economic ideas a child acquires are elementary ones: something is given up to obtain something else, the amount available is limited, and what has been spent is gone. Young children grasp these ideas through objects well before they can handle them as symbols.
A widely cited review on the question, prepared at the University of Cambridge by David Whitebread and Sue Bingham for the UK Money Advice Service (2013), concluded that by around the age of seven a child is typically able to cognitively represent value, and that several basic concepts relating to later financial behaviour will usually have developed by then, as have the self-regulation and working-memory skills on which money management depends. The finding is often simplified into the claim that money habits are fixed by seven, which the report does not say. What it does establish is that the groundwork is laid well before formal financial education reaches the classroom.
The Deutsche Bundesbank drew the practical consequence in its April 2025 Monthly Report on cash in German society. Banknotes and coins, it noted, are often children’s first contact with money and matter for the acquisition of financial competence; pocket money is usually first given in cash, and its physical, tactile character helps children understand the value of money and the finiteness of purchasing power before, as teenagers, they learn to find their way in a hybrid payment world. The Bundesbank also pointed to the social side: cash allows a child to make independent purchases early on, at the school kiosk or the bakery.
Why the physical form matters
The idea that tangible objects help children learn abstract concepts has a solid basis in education research. A meta-analysis by Carbonneau, Marley and Selig (2013), covering 55 studies and more than 7,000 students, found statistically significant effects in favour of teaching mathematics with concrete manipulatives rather than abstract symbols alone, small to moderate overall and moderate to large for retention. The authors stress that the benefit depends on how and when the materials are used; so the result carries qualifications. Coins and notes are, among other things, the most familiar manipulatives a child will ever handle, and they carry denominations, sums and change in a form that can be counted, compared and lost.
Recent qualitative work points in the same direction. A 2025 study by Andries, Wilson, Everson, McKinley and Elsden at the University of Edinburgh, carried out with families in Scotland and presented at the ACM Interaction Design and Children conference, found that a key concern for both parents and children was recognising the finite nature of money: when cash is spent it is physically gone, whereas digital money can appear limitless. The authors conclude that policymaking on access to cash should take into account its value to children and its role as a tool through which parents scaffold early financial education. Children say something similar. In a survey of 1,600 children carried out by Beano Studios and released by the Bank of England in July 2020, alongside a new primary school resource developed with Beano and Tes, using “real” money in “real” situations ranked among the three things that would make learning about money more enjoyable.
Table 1. Selected evidence on physical money and children’s financial learning
| Source | What it finds | Relevance for early money learning |
| Whitebread & Bingham (2013), Univ. of Cambridge for the Money Advice Service | By around age 7 children can represent value; basic finance-related concepts and self-regulation are typically in place | Foundations form before formal financial education begins |
| Deutsche Bundesbank, Monthly Report (April 2025) | Cash is often children’s first contact with money; its tactile character helps them grasp value and finite purchasing power | Physical money as the entry point to a hybrid payment world |
| Carbonneau, Marley & Selig (2013), meta-analysis of 55 studies | Concrete manipulatives improve maths learning, especially retention, under appropriate instructional conditions | Coins and notes work as everyday manipulatives for quantity and exchange |
| Andries et al. (2025), IDC ’25 | Parents and children value cash because spent money is visibly gone; digital money can seem limitless | Finiteness is learned more easily when it can be seen |
| Beano Studios survey released by the Bank of England (2020), 1,600 children | “Real” money in “real” situations among top three ways to make learning about money more enjoyable | Children themselves ask for tangible practice |
Screens in the classroom, second thoughts
The debate over cash in childhood runs in parallel with a wider reconsideration of screens in education. Sweden, which went further than almost any other country in replacing printed material with devices, reversed course in 2023: the government allocated SEK 685 million that year to printed textbooks and teaching materials, and more than SEK 500 million a year thereafter, with the stated aim that every pupil should have a physical textbook for each subject. The decision came amid falling international reading scores and expert warnings about the effect of screens on attention. Researchers have rightly cautioned that the decline has several causes and cannot be attributed to screens alone; the Swedish shift is best read as a rebalancing in the use of technology.
The parallel with money is instructive. A child who pays with a tablet, a phone or a pre-loaded app is performing an operation whose consequence is recorded in a ledger the child cannot see. The same child spending in-game currencies, which the Edinburgh project documents as part of many children’s money lives, encounters value in a form deliberately designed to feel weightless. None of this makes digital tools harmful in themselves; children will need to master them. It does suggest that the order of learning matters, and that what is abstract is best understood after what is concrete.
From coins to cards
Seen from the Bundesbank’s perspective, cash is the first rung of a ladder whose upper steps are digital. Its formulation, that the physical character of money helps children understand value before they learn to orient themselves in a hybrid payment world, expresses this sequence precisely, and the institution continues to invest in it. On World Children’s Day in September 2026 it presented a new children’s book on paying, in which a young ghost goes shopping and pays on her own for the first time; at the launch, its president, Joachim Nagel, told the children that he still likes paying in cash.
The practical condition for that sequence is simple. A parent can only give pocket money in coins, send a child to the bakery with a note, or let a nine-year-old count the change if cash is still obtainable nearby and still accepted at the counter. The pedagogical case for cash therefore depends on the same access and acceptance conditions that the legal tender regulation now under negotiation in Brussels is designed to secure. Financial education begins at home, and at home it still begins, for most children, with something they can hold in their hand.
References
1. Banco de España, CNMV and Ministerio de Economía, Plan de Educación Financiera: ‘Ahorra. Invierte. Avanza, lema del Día de la Educación Financiera 2026’, Finanzas para Todos, June 2026.
2. Whitebread, D. and Bingham, S. (2013), Habit Formation and Learning in Young Children, University of Cambridge for the Money Advice Service, London.
3. Deutsche Bundesbank (2025), ‘Bargeld in der deutschen Gesellschaft – ein aktuelles Meinungsbild’, Monatsbericht, April 2025.
4. Carbonneau, K. J., Marley, S. C. and Selig, J. P. (2013), ‘A meta-analysis of the efficacy of teaching mathematics with concrete manipulatives’, Journal of Educational Psychology, 105(2), 380–400.
5. Andries, V., Wilson, C., Everson, H., McKinley, C. and Elsden, C. (2025), ‘The Secret Lives of Children’s Money: Exploring Children’s Financial Interactions in Transitions from Cash to Digital Monies’, Proceedings of the 24th Interaction Design and Children Conference (IDC ’25), ACM, 52–68.
6. Bank of England (2020), ‘Learning about money and financial literacy needs jokes and games say children’, news release, 16 July 2020 (survey of 1,600 children by Beano Studios).
7. Government of Sweden, textbook funding 2023–2025 (SEK 685 million in 2023; over SEK 500 million annually from 2024), as reported by Associated Press and Kyodo News. 8. Deutsche Bundesbank (2026), ‘Bundesbank stellt neues Kinderbuch vor’, 21 September 2026.