There is no such thing as ‘too early’ when it comes to learning about matters such as financial independence and the functioning of our financial institutions. The need for understanding these subjects is amplified in the current unfavorable economic climate created by the Coronavirus global pandemic. Thus, it is important for your kids to know about the importance of saving money and know how to use their allowances in a sensible manner.
Although, it is important to take into account the age of your child while educating them on financial matters because, at their age, understanding nuanced financial jargon is nearly impossible. As the adage goes; ‘half-knowledge is worse than ignorance’; thus, directly exposing your children to our conventional banking systems at an early age could, in fact, encourage irresponsible fiscal behavior further down the line.
It makes more sense to gradually ease them into this process and communicate with them in a format they understand best. It is a well-established fact that children respond best to a ‘task-reward’ system where they are awarded for successfully completing a task or a chore. Whilst creating and maintaining this task-list along with the respective remunerations etc. could be tedious for you, an intermediary such as SpendSafe could sort you out.
SpendSafe is an app which offers you prepaid debit cards for teens on which you can load money for your children. Your children can unlock those funds for their personal usage upon completion of certain tasks or chores, as decided by you. This mechanism works better than directly handing them an allowance as it psychologically trains their mind for the real world, where they will have to earn a living.
In order to streamline their children’s spending through SpendSafe, parents first need to sign up and then subsequently register their children individually before setting an allowance for them and choosing from a list of vendors where their children can spend the allotted money.
However, there are several more key points of difference between SpendSafe and standard banks:
- Reduces mismanagement of funds: A hallmark feature of SpendSafe is that it helps you choose the vendors with which your children can execute transactions. They can choose from a vast range of vendors ranging from restaurants to shops and from movie theatres to bookstores. A standard debit card, on the other hand, can be used to pay almost anyone; thereby often resulting in misuse of parents’ hard-earned money.
- Levels the playing field: On the face of it, the platform seemingly tips the scale in the parents’ favor. But in reality, it gives the children more autonomy as they can pick and choose the tasks they wish to do, and in a way, making the money they need. Thereby improving their decision-making, boosting their self-esteem, increasing their understanding of finances and thereby helping you in creating a more holistic and well-rounded individual.
- Reduces chances of mishaps: Since this method eliminates the use of cash, it eliminates the chances of cash-related bullying or extortion of any kind, which is an oft-ignored fact but is definitely noteworthy.
Prepaid cards are easier to obtain than standard debit cards due to the stricter regulation by banks, wherein more of your personal information is requested, along with a thorough check of your banking history. Obtaining a prepaid card is relatively hassle-free.
Thus, if you’re looking for a prepaid allowance format which offers you more control as well as allows your children to have a sense of autonomy, then click here to register with SpendSafe, one of the best debit cards for teens.