Kids need to learn about safe banking practices early, financial experts say

There has been a significant increase in children receiving digital pocket money over the past five years, according to a study by the National Institute for Budget Information (Nibud) and Rabobank. The researchers argued that children should therefore learn about safe banking practices early.

“Digital money transactions involve quite a lot if you want to teach your children financially,” said Nibud director Arjan Vliegenthart. “How does a bank account work and how do you pay digitally, but this also involves risks and financial resilience. Talking to your children about money and financial matters is therefore more important than ever.”

In 2018, 77 percent of children aged 8 and 9 years old received their pocket money in cash. Now, that number has dropped to 49 percent, representing a decline of over 25 percent since 2018. The remaining children receive their pocket money either entirely digitally (28 percent, up from 15 percent in 2018) or through a combination of digital and cash methods (22 percent, a rise from 8 percent in 2018).

"This research shows that digital banking is an indispensable part of financial education," said Michiel Kwaaitaal, head of payments at Rabobank.

Almost all parents view financial education as crucial and their responsibility. The researchers argued that it is beneficial for children to learn about money management early, as parents can oversee their actions. However, the researchers noted that safe banking practices get limited attention in conversations between parents and children about money.

According to the researchers, while most parents are aware of online banking fraud methods, many do not discuss it with their children. The influence of children's advertisements on social media also remains underexposed, according to the researchers.

Vliegenthart emphasized that while youth might misuse money, they should not be blamed or shamed for it. “It is important that no one should be ashamed of this, including parents, but that they talk about it with each other without passing judgment,” he said.