A new white paper focusing on financial literacy has found that far from being an outdated form of payment, cash actually both educates and empowers our society, and that the use of cash is vitally important for everyone to develop financial competency from a young age.
The white paper, entitled, ‘From Early Childhood to Adulthood – Cash Educates & Empowers,’ published by Koenig & Bauer Banknote Solutions (K&B) – the world’s oldest press manufacturer of banknotes – uncovers several challenges when it comes to society’s understanding of the value of money and the importance of budgeting, caused largely by the growing landscape of digital payments, which has led to many adults struggling with their financial attitudes, habits and behaviour.
They found that younger generations raised in mostly digital environments are losing the tactile learning experiences that cash once provided, reducing their ability to grasp concepts like budgeting and saving.
Based on three years of extensive research, K&B’s white paper found that physical cash offers a unique and essential role in financial literacy and competency development and argues that there is an “essential educational value to using physical money during childhood that helps us all to acquire vital life skills.”
The educational power of banknotes
So, just how powerful is physical cash when it comes to children becoming financially literate adults?
A report from the German Bundesbank in 2025 supports K&N’s findings, stating that: “Banknotes and coins are often children’s first contact with money and are important for acquiring financial expertise.” They argue that the physical properties of cash help children comprehend the value of money and understand purchasing power, which helps them immeasurably for the future world of hybrid payments they will encounter in adulthood.
This view is also shared by the Bank of England, who in a 2024 study, stated: “The first time most children encounter any form of financial education, either in the home or in the classroom, it almost certainly involves cash. Cash is a key tool for parents and teachers to use when explaining the value of money and the importance of budgeting or providing the framework for understanding numbers, counting and place value.”
It’s certainly true that what we learn in our formative years generally stays with us for life. Romina Santelia, Strategy Consultant at c-Quilibrium, believes that financial education begins with the humble moneybox, which she says acts as one of the earliest tools by which children learn to manage money. She reasons that by owning cash, children experience money as something real and quickly understand that it can be earned, saved and lost – much as it does in real life.
Financial literacy in the real world
The 2023 International Survey of Adult Financial Literacy found that higher financial literacy is associated with greater individual financial well-being, freedom and quality of life, which also translates into the businesses we operate or work for and the relationships we all have with family, friends and business associates.
Evidence shows that financial literacy not only supports overall economic growth but also helps prevent businesses and individuals from going into debt and becoming victims of financial fraud – and cash is the vital component to helping us all succeed in this area.
The role of cash in 2026
While there is a common belief that we’re all heading towards an increasingly digital world these days, the truth is that cash usage is steadily increasing worldwide and across all age groups.
Recent data shows a strong affinity for cash and cash usage among young people. GenZ in particular see cash as practical rather than outdated. The younger generation wants more control over their money, and cash offers data privacy, stops the overspending that comes with digital payment methods and helps them to budget more effectively.
This is demonstrated with the growing trend of ‘cash stuffing’, where money is physically divided into envelopes for different spending categories and is helping many navigate the current ‘cost of living’ crisis.
These findings are backed up by other research published in 2025, the Global Banking & Finance Review (Issue 76), which states that the future of payments is far from being exclusively digital, and argues “it’s about preserving the freedom to choose, particularly for younger consumers whose financial habits are still taking shape.”
This view was something cash handling experts Volumatic also concluded in their 2021 white paper, ‘Consumers demand payment choice,’ which found that cash is still used regularly is the primary payment method by a proportion of the population; that cash is used alongside digital payment methods by the majority of others, and that nearly all adults keep cash on hand as a contingency for emergencies or situations where digital payments aren’t possible.
Volumatic MD, James Harris said: “Here at Volumatic, we’re proud to be industry thought-leaders, and we truly know the value of cash and how important financial literacy is for everyone – and that cash plays a vital role in this.”
“This new white paper proves the damage that can be done to future generations if cash were to disappear, and so all of us need to embrace cash, use cash and educate our children with cash to allow them to grow up understanding the true value of money.”
Ultimately, the K&B white paper calls on us all to re-examine the role of cash in our communities, not only as a method of payment but also as a tangible learning tool.
It views cash as a forward-looking strategy that empowers people with the confidence, autonomy and resilience needed to navigate the modern financial systems that exist in 2026. As the white paper says, “cash is not just about payments. It is about resilience, inclusion and choice, and these values are shared across generations.”
