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.
With growing numbers of video streaming services and product box programs, these subscriptions are becoming the newest budget buster. These seemingly small monthly charges add up, lowering a person’s ability to save along with a potential for increased debt. These ongoing financial commitments leave people with a lower percentage of free cash flow, or unencumbered income.
Subscription service spending is often overlooked especially when the payments are on auto pilot. A $4 or $8 monthly fee may not seem like much. However, research indicates that subscription services are an increasing financial burden as most people underestimate the amount. In one study, 84 percent of respondents estimated monthly spending on these services at about $80; the actual amount was over $110. In addition to video steaming services, people sign up for automatic monthly shipments of beer, wine, contact lenses, cosmetics, meal kits, pet food, razors, vitamins, and other products.
For additional information on subscription services, click here.
Have students survey several people to determine the types and amounts of subscription services being used.
Have students create a financial analysis for amounts saved over several years by reducing or eliminating subscription services.
What factors influence a person’s decision to use a subscription service?
Describe suggested actions that a person might take to reduce or eliminate subscription services.
35% of credit card holders paid only the minimum on their credit cards?
In September 2019, the FINRA Foundation released data from its latest Financial Capability Study—one of the largest and most comprehensive financial capability studies in the United States. Among the findings, younger Americans, those with lower incomes, African-Americans and those without a college degree face the toughest financial struggles. More than 27,000 respondents participated in the nationwide study. Conducted every three years beginning in 2009, it measures key indicators of financial capability and evaluates how these indicators vary with underlying demographic, behavioral, attitudinal and financial literacy characteristics—both nationwide and state-by-state.
“Sometimes the hardest thing about saving money is just getting started.”
This Bank of America article provides a step-by-step guide for simple ways to save money–money that can then be used to pursue your financial goals. To learn more, check out the 8 steps below.
Record your expenses. Ideally, you can account for every penny you spend for the big items like mortgages, credit cards, and even small items like a coffee and snacks.
Make a budget. Once you know how you spend, you can compare your income to your expenses and make changes, if necessary.
Plan on saving money. Your budget should contain a savings category. Ideally, savings should account for 10 to 15 percent of your income.
Choose something to save for. One of the best ways to save money is to set a goal. Possible goals include saving for a vacation, the down payment for a house, retirement, or anything important to you.
Decide on your priorities. Prioritizing goals can give you a clear idea of what is most important and helps to remind you why you are saving money.
Pick the right tools. There are many saving options and the choice often depends on the amount of time before you need the money. Often, money for short-term goals is placed in savings accounts. Money for long-term goals may involve stocks, bonds, or mutual funds.
Make saving automatic. Banks offer automated transfers between checking and savings accounts. Automated transfers are great because you don’t have to make a decision to save or invest; it just happens.
Watch your savings grow. Checking your progress every month helps you stick to your personal savings plan.
Many people in our society are not able to save. They are barely able to cover their monthly expenses. However, there are some actions that can help you get on a path to saving.
In the first month, open an online bank account and deposit a minimum amount, such as $5. This is a very important first step. In month two, save $15 (or more) in your online savings account. One way to do this is with Paribus, an online tool that searches various retailers to determine if you are owed money for past purchases as a result of a price drop.
Your goal for month three is to work toward savings $100. This could be accomplished by signing up with market research companies to participate in providing opinions. Or, you could try selling old items online. By consistently using various ideas for earning extra money, you should be able to save $100 a month.
For additional information on starting a savings program, click here.
Have students to talk various people to determine actions they take to reduce spending or earn extra money.
Have students create a summary presentation describing actions that might be taken to increase a person’s savings.
Describe attitudes and behaviors that might result in people not being able to save for the future.
What are actions you have taken to reduce spending and to earn extra money for savings?
An estimated one-third of recently married couples are surprised by the financial situation of their spouse. A similar number (36 percent) are not aware of their partner’s spending habits. Based on a study by Experian Plc, only 40 percent knew the credit score of their partner.
Men more often hid money from spouses. About 20 percent of men had secret bank accounts about which their partners didn’t know; compared to 12 percent of women. Regarding the maximum amount that they would spend before consulting with their spouse, men replied $1,259; women said $383. Hidden financial information can have a significant adverse effect on the relationship of a newly married couple.
For additional information on newlywed finances, click here.
For additional information on the survey results, click here.
Have students survey newly-married people about their disclosure of financial information to their spouse.
Have students create a list of problems that might arise between newly-married people who do not inform their spouse about their personal financial information.
What financial information would be most important for newly-married people to disclose to their spouses?
How could a lack of disclosure of financial information to a spouse create relationship difficulties?
You are in line at your local grocery store and all the snacks, candy, and cheap gadgets are beckoning to be picked up and added to your shopping bag. You are shopping on-line and you only need to spend $8 more to get free shipping. How do you avoid falling prey to impulse buying? How are marketers reducing friction to get you to buy more stuff? As a consumer, factoring in additional transaction costs will help you avoid making impulse purchases.
Gas prices have been low for a few years but, it is always good to save a few more dollars!
What if you are in a new city? Gas prices can vary by 10-15 cents per gallon in a matter of a few blocks. How would you know where to find the cheapest gas? Good news! The GasBuddy app can help you find the best prices on the go.
While beneficiary, collateral, and fair market value are familiar to many, these terms can be especially confusing to those with limited English-language skills. In an attempt to assist various people, the Consumer Financial Protection Bureau has created the Newcomer’s Guides to Managing Money to provide recent immigrants with information about basic money decisions. These guides offer brief suggestions to those who are new to the U.S. banking system. The guides also include guidance for submitting and resolving problems with a financial product or service.
The Newcomer Guides include these topics:
Ways to receive your money, comparing cash, check, direct deposit, and debit cards.
Checklist for opening an account, to assist with starting a bank or credit union account.
Ways to pay your bills, providing guidance on whether to pay by check, debit card, credit card, or online.
Selecting financial products and services, providing assistance on deciding which financial services are right for various household situations.
Print copies of the guides can be ordered or downloaded. These publications are available to English and Spanish with additional languages to be offered in the future.
For additional information on money guides for newcomers: