German children are brought up to save conservatively
Children and money – often this is a delicate combination. Because dealing with one’s own finances needs to be learned. While children, for example, are becoming more and more adept at dealing with social media and are several steps ahead of their parents, things are different when it comes to money: Children are educated by their parents to be conservative savers. And the market – especially the established Volksbanken – is missing a huge opportunity;
Old-fashioned savings behaviour
A recent survey of more than 600 parents and almost 400 children aged between six and 14 years has shown that German children are mainly raised to be quite conservative savers: More than 60 percent of the parents state that all or at least most of their pocket money is saved and should be saved. The frightening thing: The money ends up in every second child’s piggy bank! And that’s where it stays for the time being, because, as the children themselves stated, the vast majority of it is put aside for larger purchases.
The motivation behind this behaviour is quickly explained: children learn from an early age that saving “is important”. They listen to their parents and think about their future and put money aside deliberately. So at first glance, parents can be congratulated, because the educational work seems to be bearing fruit. The pocket money is not spent immediately.
But at second glance, it also becomes clear that this is perhaps not so positive and far-sighted. Because apparently nothing has changed since the parents’ primary school days. Modern, digital and flexible forms of investment do not play a role; instead, the analogue piggy bank is still – as it was 20, 50 and 200 years ago – highly popular. It’s a pity, really, because this means that parents cannot fulfil their task of showing their children the many possibilities of investing money. The survey makes it clear that parents are the most important influencers for their offspring when it comes to money. However: It is to be feared that there is also great helplessness among parents. That they perhaps do not even know what modern saving means, let alone how they can teach their own children;
wasted potential of market participants
So there is a huge gap between what would be technically feasible and what is reality in families. Of course, primary school children do not have to become day traders. However, child-friendly pocket money management systems could teach the youngest children what money actually is, what its value is and how it can be increased through a clever and far-sighted strategy. This is important because the act of spending money in 2020 is no longer just a simple purchase in a shop, for example.
The logic of contactless numbers is difficult to understand, at least for small children. From a certain age on, children continuously encounter purchase options in social media or game apps. Anyone who hasn’t learned to use their money responsibly then quickly falls into a trap.
“The logic of contactless numbers is difficult to grasp, at least for small children.”
If that doesn’t happen, the gap between the piggy bank and the contactless payment at the supermarket checkout widens even further. Because these are the two worlds in which children move. What we need are digital piggy banks, bridges that create connections and show that there are more contemporary ways of saving than just collecting cash. After all, anyone who only comes into contact with cash from an early age will be overwhelmed by the “virtual” money and possibly develop fear of contact;
An online survey by KB&B – Family Marketing Experts (July 2020) of parents provides information about their children’s saving behaviour and how parents deal with the topic of “pocket money”: