5 Reasons Piggy Banks Aren’t Just Obsolete, They’re Counterproductive

Piggy banks have been around for centuries. They are where generations of children have stored their money – both pocket change and their lifetime savings. Money, in some form or another, has existed ever since the first coin was crafted in the 7th century BC. From rudimentary coins to sophisticated bills with 3-D security ribbons, physical currency has had a good run and isn’t going away anytime soon. However, the use of cash is in a serious freefall.

Year over year cash payments have drastically declined. This trend was well on its way when 2020 happened and hastened its demise. Take a moment and think of your ratio of cash v. digital currency use. Debit & credit cards, Apple Pay, Venmo, PayPal, wire transactions, Google Pay, Zelle, etc… The alternatives seem endless, and their use has overwhelmed the once almighty dollar bill.

Here’s a fun little fact – the most common bill in circulation now after the $1 is the $100 bill. The theory is that it’s due to the fact that people aren’t using cash as much for everyday purchases, and it is instead most frequently used for illicit purposes.

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Why Piggy Banks Affect Children

If you were teaching your kids about money up to and during the late 20th century, the piggy bank would have been the obvious choice. But fortunately, technology has evolved to catch-up with the financial trends, and the piggy bank isn’t only obsolete, it might be counter productive.

We have compiled a list of reasons you should be transitioning your children into a digital piggy bank if you want to prepare them for the actual world in which they’re growing up, instead of the world they’re leaving behind.

1. You Don’t Store Your Money Under Your Mattress – Neither Should Your Kids

We’ve all heard of storing money under a mattress. It’s a surefire way to ensure that both moths and inflation slowly (or not so slowly) eat away at its value. While it can certainly be handy to have some cash readily available, money is generally best stored in FDIC insured financial institutions.

The piggy bank is just the mattress equivalent for kids. This is not the way to teach kids how to store their money. Money habits are set by age 7. By age 7 you should transition your kids into learning the ins and outs of the digital currency world.

2. Piggy Banks Don’t Keep Track of Spending, Saving and Giving

Teaching kids to form good money habits is all about teaching them about spending, saving and giving responsibly. Piggy banks don’t allow children to differentiate or set-aside money for specific purposes. They don’t keep track of deposits and withdrawals, savings goals or generosity.

Digital solutions, like the My First Nest Egg app, offer a way for kids to see where their money is going and watch it diminish and grow. They can visualize how much they have spent and see how quickly it adds up when they set automatic savings.

3. You Can’t Teach Kids Interest with a Piggy Bank

Piggy banks don’t teach kids one of the most valuable lessons they need to know about money – how to make it make money. Money goes into a piggy bank without much tracking, and there it sits until it’s spent.

A virtual piggy bank will allow you to teach your kids the power of interest – early. You set the interest rate on their savings account and it pays monthly into your child’s savings account. Your child gets a monthly notification that they made money – just by being patient and not spending.

4. Two Words: Tooth Fairy

The Tooth Fairy suffers from the same issue so many parents find themselves facing. Cash is hard to come by. Exact change, nearly impossible. Rumor has it that the Tooth Fairy can make deposits into your child’s digital piggy bank.

This solution doesn’t only help the Tooth Fairy, it helps parents. Now you can pay your child rewards and allowance with the push of a button. No more IOUs that never materialize or rounding up or down depending on what you find in a pocket. Kids can actually start to learn about how money works because they’ll be regularly interacting with it in a digital form.

5. Welcome to the Digital Bank with No Real Account Needed

A digital piggy bank introduces your child to real banking without a real account. They’re too young for debit cards, but not too young to learn good habits. One of the main reasons kids are undereducated about money is that they don’t talk about it at home. Piggy banks don’t help. When they get money, they essentially stash it away.

A digital piggy bank lets your kids experience money and learn the lessons that will make them successful adults. It’s all a virtual tracker – they cannot lose it. Parents are in control of when they can spend. If they want to make a purchase, mom and dad buy and easily debit the child’s account. How often does your child actually take money out of a piggy bank to spend? Because piggy banks are passive, kids lose out on the opportunity to interact with money during the formative years that their money habits are set.


Piggy banks are a lingering vestige of a bygone time. They might be cute, but they are sending the wrong message to children about money. You might not think this matters because kids are young, and piggy banks are fun, but money habits are actually set by age 7.

Every parent knows that we have a limited time to influence our children. Teaching children good money habits is crucial for them to grow into successful adults. The earlier you start, the more impact you will have, the more financially successful your children can be.