As adults, we’re becoming more demanding in terms of how quickly we want to get our hands on stuff. We expect to buy and get a product or service both quickly and easily and this rubbing off on our children, “I want it now!” In which case how do you teach the younger generation to shop savvy?
As parents, we need to take responsibility for teaching our children to budget, save and spend responsibility. This might include setting up savings accounts for their pocket money, teaching then about searching out the best deals, and introducing them to discount codes and money back coupons.
A nod to employee reward schemes
There’s no doubt that having their own savings accounts teaches children to be more money aware. But in recent years several other options that have become available to parents and children, other than the typical child savings account. Several companies are now offering products and services to help parents teach their children about budgeting, saving and spending responsibly.
These products and services give a nod to employee reward schemes. For example, online services such as Roosterbank act like online accounts allowing parents to top up their child’s account with their pocket money. When the child has enough money saved up to buy something they want they can flag the item online for their parents to buy. To me, this represents a child’s version of a points-based employee reward solution.
Prepaid cards for pocket money are increasingly popular
Additionally many parents are turning to prepaid card solutions. For some parents giving their child a prepaid card and topping it up with a monthly allowance or weekly pocket money solves the problem of having enough cash available to give to their child. But providers such as goHenry and Osper also offer functionality to teach children how to earn and save money as well as providing spending safeguards that regular bank accounts don’t offer to children.
Many parents are concerned about how their children spend their pocket money, especially as once a child turns 11 most UK banks give them a fully functioning debit card. Guardian Money highlighted the case of a boy whose bank sent him a Visa debit card without informing his parents. His first purchase was a box of 200 cigarettes; his second purchase was Viagra and his third a fake ID card, all bought over the internet.
Because prepaid cards are not credit or debit cards children and teens are not able to spend more than the credit balance. But like credit and debit cards they can be used wherever the MasterCard or Visa is accepted, and they can be blocked if the card is stolen or lost. Parents can also set spending controls such as a maximum weekly limit or if it can be used online.
And just like a prepaid card reward scheme, children can also earn additional rewards. They can earn money for chores and tasks and the money loaded onto the card with a few touches on a smartphone. They can check their balance 24 hours, seven days a week online.
Teaching our children about money
Saving, careful money management and how to use the internet responsibly to find deals are conversations parents need to have with their children. In my experience, children are keen to learn about these things: we just need to harness their enthusiasm. As parents, we can do this by giving them supervised responsibility for hunting out bargains and helping them budget, save and spend responsibly with a prepaid card.