Children need to be financially literate. This is what the government and educational institutions are trying to convince parents and children about. In recent times, many surveys have been conducted regarding the issue. The Jumpstart Coalition Survey for Personal Financial Literacy for children came up with a disappointing report that high school students answered only less than half questions correctly on bank accounts and credit cards! Not only school children but young adults also seem to be desperately lacking in money management skills and financial literacy. Earlier, money was quite an easily available resource. But not anymore! The recent recession has made it imperative for every American to spend his/her money wisely and it should start from the lowest levels of society – the children.
As children spend a lot of time in a home, the onus of imparting financial education lays fundamentally with the parents and after that the school teachers. The Real Deal: Playing the buying game, Teach Children to Save from ABC and Financial Fitness for Life are some of the online resources that are available for parents to teach financial education to their children. Non-profit organizations like National Council of Economic Education, Jump$tart Coalition, and Operation HOPE are aimed at teaching financial literacy to children and teenagers in a fun and interactive way. Apart from these resources, according to Smart Money, there are three top financial products that you could give your teen or tween to learn money management.
This is a prepaid debit card. Give it to your child and just like the ATM card or the credit card your child uses the card to withdraw money or buy something. You can track the expenditure online. You can set alerts that will signal low balance in the account to the child. The feature of declined transactions teaches the child that he/she will not be able to get goodies or services if his balance is low. This will put him/her into the habit of maintaining a minimum amount of money in the account. Children can learn to use adult credit cards appropriately by practicing transactions on the FaceCard. Children can be taught the process of money transfers and accepting payments with the FaceCard. Charges on ATM withdrawal are existent. FaceCard is going to be chargeable from the 21st of this month.
Oopay Family Account
Obopay enables you to teach mobile banking to your teenaged children. You open a joint account with your child financial literacy through a prepaid debit card. The children get to understand mobile banking technology. They can send and receive money via their mobile phones and they can track their expenditures through that. Both parents and children can monitor their spending. Though signing up is free, there are charges for certain services and this teaches the child that services come at a cost.
This is a website that your tweenager or teenager can access to buy things. He/she will place the request there in your account and you’ll grant them the request at your discretion. You can also keep a track of the people to whom your child is sending gifts or money and also his/her spending patterns. You are not revealing your credit card number to your child. child money management skills
Well BillMyParents does give you greater control over your child’s expenditure, but I feel the child will not learn money management perfectly if he/she is not given greater autonomy. It’s only when you give him the freedom to handle his/her money independently that you’ll come to know his financial mindset and behaviour. No doubt, from the parent’s point of view Billy’s the option that involves the least risk.
I suggest you use all the three products in a good combination to teach your child money management skills. But before that, you’ve got to do some background work. Give them basic lessons in spending, saving and budgeting. Without knowing the ABCs you can’t expect them to learn the DEFs of finance efficiently.