Half of 10- to 12-year-olds keep track of their account balance

• Two thirds of 10- to 14-year olds get their pocket money paid directly into their own bank account.

• More than half (54%) of children aged 10 to 12 with a current account almost always know how much money is in their account.

• Three quarters of parents see giving children their own debit card as a useful tool for financial education.

• That said, a third of children say they have had no lessons in money management or don’t know.

Piggy banks full of coins are less and less a feature of childhood life. Two thirds of ten- to fourteen-year-olds with a bank account indicate that their pocket money is transferred directly into their account. This age group has fully embraced the digitalisation of money. Even the youngest age bracket is already familiar with digital money: more than half (54%) of children aged ten to twelve almost always know how much money is in their account. These are a few of the findings of new research commissioned by ABN AMRO and performed by Verian research agency.

Children quick adopters of digital finance

Parents are positive about their children’s shift to digital finance, with 71% of parents indicating they are confident that their children can manage their money. Many children use digital tools to keep track of their account balance and make payments. “Five years ago, figures published by National Institute for Family Finance Information Nibud revealed that only 9 per cent of children over ten checked their account statements without being asked to. This goes to show how fast the transition to digital has been among youngsters,” says Babet Boswinkel, Youth & Finances expert at ABN AMRO.

Parents trust their children, but still want some control

Many of the parents surveyed see the added value of financial education, the study also shows. Half of the participating children indicate that they learned about money from their parents. Giving children their own debit card is seen by many parents as a suitable learning tool. Almost three quarters (71%) believe their children learn to manage money better by having not only their own account, but also their own debit card. Practically all the children (97%) who took part in the survey have their own account plus a debit card.

“It’s good to see that parents, instead of distrusting, are keeping pace more with the world as their children experience it. The point is to teach them how to manage money, no matter whether it’s cash or digital,” Boswinkel observes.

Learning to let go with confidence

As children grow older and start attending secondary school, they are given more freedom in managing their money. This is when a third of children are given their own debit card to go with their bank account. They can use it for things like purchases at school or public transport. Three quarters of thirteen- and fourteen-year-olds are allowed to decide for themselves whether they take their debit card with them and what they spend their money on. In all surveyed age groups, a considerable percentage (41%) are allowed to spend whatever amount they have in their account, because no limit has been set. That said, over three quarters of the participating parents (80%) almost always keep an eye on their child’s account.

The bank believes it is important for both children and parents to choose the right time to begin children’s financial education, for example by talking about money matters. "As a parent, what you want, of course, is for your child to grow up to be a happy adult who can stand on their own two feet," says Boswinkel. "This is a process of learning by trial and error, in which your child learns to make choices and resist temptations — and learns that money can run out."

"Children often know how much money they have, but they are not so good at keeping track of what they spend it on. This is where parents have a role to play, by actively talking to their children about smart money management. This lays the foundation for healthy financial habits that will benefit them throughout their lives. Parents want to protect their children, but they also want to give them room to grow independently. This is why ABN AMRO offers parents the tools they need to begin to let go."

Insights from the children’s perspective

Over 600 children between ten and fourteen years old with a bank account of their own were asked how financially independent they are. Their parents were asked how independent they think their children are, and to what extent they give their children freedom in this learning process. Contrary to what is often thought, both children and their parents turn out to be positive about children’s financial independence and their adoption of digital finance. A majority (78%) of the children indicate that they are good at managing money, and the majority almost always know how much money they have in their account.

What did children say?

Children most often (32%) ask their mother for permission before they buy something.

Most children learn from their parents and at school how to look after their money and how to pay with a debit card. That said, a third indicate they have not been taught about money matters or don’t know.

For children, as for adults, discussing their own financial situation is often taboo. Only 17% of the children surveyed indicate that they talk to friends about money.

As children grow older, the things they spend their allowance on change. Children aged 10 to 12 often still buy toys (51%), but from the age of 13, they most often spend their allowance on food and beverages (83%).