Eight-year-olds are typically busy being eight-year-olds. They build with Lego, debate the merits of Roblox or Fortnite, trade cards, collect stickers, ride bicycles, and attempt to convince their parents to purchase another popsicle or small toy. If they receive pocket money, they weigh whether to spend it immediately or save it for the following week.
Naturally, some children possess relatively high financial awareness. My eldest son, for example, has always shown an interest in money. By age four, he began collecting coins and later "Paper money," meaning banknotes, which he sorted by color: Purple, red, pink, and green. Eventually, questions followed regarding how much items cost, what was more expensive, and what was cheaper.
By the standards of a child his age, his financial awareness was quite strong. Yet, it was limited to what he could see and hold. For him, money was something tangible that could be counted, sorted, and placed in a piggy bank–not an abstract concept.
Banks and credit card companies see children as their target audience
While eight-year-olds are occupied with activities matching their biological age, banks and credit card companies are focused on something entirely different. For them, third graders are already a target audience. In recent months, they have begun competing for the pockets of eight-year-olds. One bank offers a digital platform featuring a prepaid card and interest on a deposit, another markets a digital wallet with savings and money transfer features, and credit card companies are peddling their own prepaid cards. Everything is packaged in educational language, employing lofty rhetoric about independence, responsibility, and financial education.
On the surface, the goal appears entirely legitimate. After all, we all want our children to learn to manage money properly. However, there is a vast difference between teaching a child what money is and marketing a financial product that they are not yet capable of understanding.
According to the Swiss psychologist Jean Piaget, one of the most influential researchers in child development, children aged seven to 11 are in the concrete operational stage. During this phase, they think logically, understand cause and effect, and know how to compare and solve problems, yet these processes rely heavily on tangible objects. Ideas that cannot be seen or touched are more difficult for them to grasp, typically requiring concrete demonstration.
This is evident in almost every aspect of life. In mathematics, for example, they can solve complex addition and subtraction problems, but fractions are still more easily understood through the image of a pizza or division into blocks. In science, they struggle to comprehend invisible processes, such as immune system activity or gravity, unless illustrated through a story or analogy. Their perception of time is also evolving. They understand days, weeks, and months, can read a clock, and eagerly await summer vacation, but concepts like "In ten years" or "Saving for the future" remain distant. The far future is still perceived as an idea to which it is difficult to attribute real meaning.
These characteristics manifest in their relationship with money. An eight-year-old understands that money buys goods. He understands that a NIS 100 bill is worth more than a NIS 20 bill, knows how to compare prices, and understands that if he has NIS 20 and spends NIS 15, he has NIS 5 remaining. However, this holds true only as long as the money is tangible.
This is precisely where the gap opens between the world of children and the world banks are trying to sell them. A credit card, a digital wallet, or a payment app represents money that cannot be seen. To an eight-year-old, a card is tapped on a terminal and the product arrives. He does not see the banknote passed to the seller, does not see the wallet emptying, and the connection between payment and the parents' labor to earn that money is not yet self-evident.
Saving also looks different through the eyes of a child. Eight-year-olds are capable of delaying gratification, but usually for a clear, immediate, and tangible goal–a new ball, a computer game, or a bicycle. They can see how one shekel added to another accumulates to the required sum. But saving "For the future," "For university," or "Just in case" requires more abstract thinking. It is difficult for them to understand why they should forgo something they can buy today for a goal that will be realized in years, simply because the distant future is not yet perceived as something real.
Can we really expect a third grader to understand the meaning of annual interest?
Even adults struggle to understand interest, yield, or deposit terms. Many people sign loan agreements without grasping their true cost, so can we really expect a third grader to understand what a 4% or 6% annual interest rate signifies, or why one should even deposit money into a savings account?
Genuine financial education looks different. It begins with a piggy bank, with half-shekel and ten-agorot coins, then with a NIS 20 bill, and with the decision of whether to buy now or wait until next week. It begins with learning that not everything desired can be purchased, that there is a difference between a want and a need, and that if you spend all your pocket money on the first day, you must wait until the following week. Precisely because children at this age learn through the tangible world, their economic education must also begin there.
In a country where there is almost no financial education in schools, banks and credit card companies have stepped into this vacuum. Make no mistake: They are not doing this out of concern for the children's financial future. The pocket money of an eight-year-old does not truly interest them. What interests them is the customer of 20 years from now. If the child grows accustomed to their app, their card, and their brand from a young age, there is a high probability they will remain there when the time comes to open a bank account, take out a loan, or request a mortgage.
Clearly, companies want customers. That is their precise objective. But wrapping a marketing campaign in terms like "Financial education," while the children targeted by these products are not yet mature enough to understand the financial world being sold to them, is another matter entirely. Before teaching a child to use a digital wallet, it might be wise to ensure they understand what money is. Only then can we teach them how to manage it.