The most cheerful people on the planet are about to get some help managing their finances.

In Finland, which topped the most recent UN world happiness report, the central bank is drawing up a financial literacy strategy for citizens.

The idea, conceived in a country that outperforms much of the rich world in education, is to figure out whether more financial acumen will help Finns borrow less.

Finnish household debt has doubled in the past two decades against a backdrop of falling interest rates and the gradual obsolescence of cash as a form of payment.

The people of Finland, home to companies such as Nokia and Rovio of Angry Birds fame, are known for being more tech-savvy than most. But their willingness to embrace digital payments over cash has coincided with less discipline in their spending habits.

Now, a record 7% of Finland’s 5.5-million citizens cannot pay their bills, up by a third over the past decade. In recent years, the authorities have raised the alarm on growth in consumer credit in particular.

Juha Pantzar, executive director of the Guarantee Foundation, which helps overindebted people regain control of their finances, says the fact that “cash has vanished” has created a new reality that is “obscuring people’s feel for money”.

“A lot of people have a hard time estimating where their money is spent, how much they will have left at the end of the month, and how much they can afford to borrow,” he said.

About 20 years ago, cash was used in 70% of payment transactions at stores, with cards accounting for the rest. Now, those metrics have flipped: card, mobile and other digital modes of payment were used in more than 80% of the time in 2018, according to data compiled by the central bank.

Olli Rehn, the governor of the Bank of Finland, says, “consumers have largely already moved to a digital world” when it comes to payments. “People no longer have such physical budget limitations as they used to do, and that makes it harder for people to manage their finances.”

Read the rest of the article at Business Day