Action of the Week, June 7, 2026

The Educational Power of Cash

Companies that print banknotes are a quiet constituency with a vested interest in keeping cash alive. The world’s leading banknote printer—the Lausanne-based Koenig & Bauer (K&B) Banknote Solutions (a subsidiary of the German Koenig & Bauer)—shares the good news that not only is the banknote “still alive and well,” but production is increasing by 2% to 3% every year. One key reason, as K&B Banknote Solutions understatedly summarizes, is that cash offers “unparalleled security in contrast to the need for the protection of data collected by digital actors and their sometimes questionable use.”

In late 2025, K&B Banknote Solutions published a white paper highlighting another all-too-rarely acknowledged function of physical cash: it develops financial literacy among young people in a way that digital money cannot. Commenting that “We need to expand our thinking around the wider role of cash in people’s lives,” the company’s CEO emphasized the significance of early exposure to cash:

“The white paper clearly demonstrates how early childhood interactions with cash via play, pocket money, saving and other activities directly contributes to the development of responsible and sustainable financial attitudes & behaviour in adult life.”

Researchers have been studying the ramifications of going cashless for almost half a century, drawing some sobering conclusions about the “neural correlates” of digital payment methods versus cash:

• Digitized transactions cause us to change our spending habits: “We are much looser with our money when it only exists in an evasive digital form, and we often spend money that we wouldn’t if we had to make the same transaction with physical cash.”
• Digital payment methods such as credit cards “create an anticipation of pleasure.” In other words, swiping or tapping gives the brain a dopamine hit. This is “a bit like the smell of baking cookies triggering your appetite,” MIT colorfully adds, noting that casinos and other entities have not hesitated to exploit this mechanism to foster gambling and shopping addictions.
• The consequences of the cashless nudge and manipulation by a “psychology designed by billion-dollar companies to make you spend without feeling it” can be dire. One blogger observes that one in six Americans “say their spending habits have, in their own words, ruined their lives. Not inconvenienced or stressed them out but Ruined” [emphases in original].

For children, cash offers concrete experiences that have unique and lifelong educational value:

“Most children aged 5 to 11 receive pocket money exclusively in cash, because it lets them experiment—to save, to wait, to miscalculate, and to try again. Cash gives children a framework for understanding that money moves through life in a rhythm: earned, saved, spent, replenished. Digital transfers flatten that rhythm into a number that changes without explanation…. When pocket money arrives by bank transfer, parents speak less often with children about spending and saving. Children lose the chance to see money diminish or accumulate. Budgeting becomes abstract.”

Perhaps this is why the #cashstuffing hashtag has gone “viral” as a budgeting tool among millennials and Gen Zers. A variation of the envelope system popularized by Dave Ramsey, “cash stuffing” involves physically placing cash into envelopes labeled with different spending categories such as groceries, gas, household supplies, personal care, and entertainment. These cohorts, perhaps deprived of cash-based financial literacy as children and teens, are rediscovering the practical lessons that only cash can provide.