Financial Literacy for Kids: Where to Begin
As the mom of young kids, I haven’t had to explain too much about money management yet. We’re still learning the difference between the quarters, nickels, and dimes in our piggy banks. At the moment, my kids still aren’t entirely sure if our house cost one hundred dollars or one hundred million dollars. (Hint: It’s neither.) But in just a few years, my husband and I will sit down and talk about the basics of financial responsibility, at least with our eldest. It will be one of our priorities as parents.
Growing up, my parents taught me the value of money from a very young age. As soon as I was old enough to grasp the concept, I received a small weekly allowance that I could spend or save. It was at that point in my childhood that I was expected to buy certain things myself: toys, books, video games. When I entered high school, I was responsible for buying my own makeup, jewelry, and some of my clothes. After I got my license, my parents helped me buy my first car, but I had to get a summer job to contribute to the cost and pay for gas. When I had a small fender-bender due to careless driving, I paid for some of the repair work. I truly valued my car because I had put so much of my time and effort into earning money to buy it and take care of it.
It was only when I became a fully independent adult that I realized just how valuable those lessons were. I’ve had a number of friends confess to me that they don’t know the first thing about money management or financial planning because no one ever taught them the basics. As a result, they struggle with their monthly bills, don’t know how to get out of debt, and have very little in their savings accounts. I try to offer what advice I can, but we agree that the best way to stay out of financial trouble is to start saving at a young age. That’s why I’m determined to give my own kids the same gift my parents gave me: an early life lesson on the value of money. It’s how I’ve achieved and maintained financial freedom throughout my adult life.
Debit and Credit Cards for Kids: Are They Smart?
Back when I was young, learning basic financial literacy skills meant opening a bank account, depositing cash and checks, and recording it all in a register. The world has changed quite a bit since then, and I rarely write or receive checks these days. I almost never have much cash in my wallet, and I put just about everything on my credit card. I find it easier to keep track of my spending that way, and I make sure to pay my balance in full every month so that I don’t rack up debt and interest. Furthermore, on the most practical level, using a credit card keeps me from dropping and losing cash when I’m on the go.
When it comes time for my kids to start earning and saving their money and deciding how to spend it, we’ll likely consider a debit card. I like the convenience of a card like Greenlight because I can transfer funds instantly from my account right to my kids’ accounts. That’s handy when I’m giving them their allowance or a birthday gift, and it could be crucial in an emergency situation. Through the app, I’ll also be able to monitor their spending, set certain spending limits, and even turn off the card if it’s lost or stolen.
The Greenlight kids’ debit card seems like a good way to ease into the world of cashless payment. Once your child understands how using a debit card works, it’s easy to explain how a credit card is different. From there, you can talk about how to build your credit and why it’s good to search for cards with lower interest rates. You can use Greenlight’s spending-limit function to talk about why it’s not good to spend money that you don’t really have and avoid accruing credit card debt. And if you’ve opted into Greenlight’s premium features, you can even help your child invest some of their savings for future endeavors, like college. Greenlight Max even offers 1% cashback on every purchase.
Kids don’t always have the greatest judgment, which is why it’s helpful that Greenlight includes some safety features. You can monitor 100% of your child’s spending and saving activities, and they won’t be able to use the card for certain unsafe purchases.
It’s never too early to start teaching your kids to manage their money. They’ll have a greater appreciation for its value, not to mention the work it took to earn it. Teaching financial literacy to children means you’re setting them up for a lifetime of good choices and fewer worries. And today, handy programs like Greenlight can make it a little easier for everyone involved.