Kids are no longer using a piggy bank to obtain financial responsibility. Instead, digital tools, such as debit cards and apps, are the basis for learning smart spending and wise money management. Many of these products are prepaid cards that help kids track their spending, and also include customizable oversight features for parents. Some available products include:
- FamZoo (famzoo.com) makes use of parent-paid interest to encourage saving. Common users of the app are preteen and young teenagers, but may also be used for kids from preschool to college.
- Greenlight (greenlightcard.com) allows parents to control the stores at which the debit card can be used. Greenlight plans to introduce an investing feature to move users to a higher level of financial literacy.
- gohenry (gohenry.com) is an app for kids (ages 8 to 18), but may be used by younger children. The emphasis is on building money management confidence in a safe setting while learning to spend and save.
- Current (current.com) is a custodial bank account aimed at teenagers. Parents may also open accounts for younger children.
These products allow parents to channel digital funds to their children to pay weekly allowances. Also, kids may divide their money into accounts for saving, spending, and donating to charity. Most apps have a monthly fee, ranging from $3 to $5.
When using prepaid debit cards with children, consider the following:
- Spend time talking about why the kids want to buy various items, and why certain household tasks earn money and others do not. Expand the Connect the discussion to talk about total family finances as well as money attitudes and values.
- Allow freedom to make spending decisions to give kids experience at managing money, and to make mistakes from which they will learn.
- Ask older kids to buy household items, even though they might be reimbursed. Buying shampoo, toothpaste, and snacks will prepare them for when they are on their own. Also consider billing them for monthly expenses, such as the cost of their cell phone.
For additional information on prepaid debit cards for kids, click here.
- Have students conduct online research to evaluate apps that might be used by parents to teach their children smart spending and wise money management.
- Have students talk to parents to obtain suggestions that might be used to teach wise money management to children.
- What are the financial, social, and relational benefits of children learning smart spending and wise money management early in life?
- Describe some possible money management learning activities for children that do not involve the use of technology.