The growing number of digital transactions means that children are less likely to see parents handling money these days. But, as Claudia Hammond, author of the explorative Mind over Money, says "The use of physical cash continues to play an important role in establishing healthy money habits".
“The whole concept of money is a profoundly psychological one, which makes it hard for young children to grasp,” she says. “The advantage of cash is that it’s very concrete and children can count and see exactly how much they have. When they are small, they have no idea what £5 will buy them, but they will consider a pile of pound coins to be treasure and will begin to value it.”
"Money in an account online, represented by digital numbers, rarely has the same impact" she explains.