4 Reasons You Should Give Your Kids a Debit Card

This is a guest post written by Catherine Alford, founder of the award-winning personal finance blog, www.CatherineAlford.com.

I grew up in a family where we didn’t talk about money. Once, I asked my mom how much money she made, and she whipped around in the car and scolded me saying, “That’s a really personal question. Don’t ever ask anyone that.”

So, for a long time, I felt shame around the idea of money. My parents taught me, through their actions, that money was very personal. It was better not to speak about it.

In a way though, it worked out, because when I became a teenager, they gave me a debit card. Every month, my parents put $100 on my debit card, which seems incredibly generous looking back. However, this meant that if I wanted a t-shirt at Abercrombie & Fitch (because I was so cool back then) I used my card. If I wanted to get my hair done for a high school dance, I used my card.

cat-alford-high-school-prom

Here I am as a sophomore at a high school dance with my hair done.
I’m mostly sure I’m drinking sparkling apple juice in this picture.

At the time, I didn’t realize how unusual this arrangement was. Now, I know most parents simply give their kids cash to go to the mall with their friends or to buy fast food. For me, I had to consider each and every purchase I made.

To be honest, that was the greatest gift my parents ever gave me.

By giving me a pre-set amount to spend each month, I had to make choices about what I bought. If I wanted something that was expensive, I had to save money each month until I could pay for it.

It also made me want to work. As soon as I could, I got my first job. At 13 years old, I worked at a dress store, greeting customers and bringing clothes to the changing room for them. I also tutored other kids. By the time I was in college, I had a variety of jobs from teaching ballet to 3 year olds to working in the special collections library at my university.

Because I learned how to use the money my parents gave me responsibly, it made me want to create money on my own.

This is why I’m so passionate about kids using debit cards. There is a new app now called Greenlight, which allows you to get a debit card for your kids and control the card from your phone. Below are four reasons why I’m so excited about Greenlight and why I think it’s a great idea to give it to your kids.

1. If your kids lose their Greenlight card, they don’t lose your money.

It’s easy for a teenager to lose a $20 bill. Things happen. Sometimes they stick it in their back pocket and you find it in the laundry. Sometimes it’s gone forever.

With Greenlight, you don’t have to worry about your kids losing your hard earned money. Here’s how it works: You and your teenager download the Greenlight app and get the Greenlight card in the mail. You place money on the Greenlight debit card using the app, and your kids can use it to make purchases.

If they somehow lose their card, you can just hop on the app and freeze the card until a new one arrives. No lost money. No lost time.

2. Your kids can travel internationally without exchanging money.

There are so many opportunities for kids to travel these days, whether they’re going on a trip with you or heading out on their first international trip with their classmates.

Before apps like Greenlight existed, parents would have to send their kids on international trips with cash or travelers checks (what the heck are those?). Then, they had to worry about their teenager getting terrible exchange rates at the airport or somewhere else.

One time I traveled abroad as a teenager and used an ATM to get foreign money out. A man came right up behind me as the ATM was spitting my money out and asked me to give it to him. I yelled “No!” pretty loudly, and that scared him away, but the experience stays with me.

With Greenlight, you don’t need to use an ATM at all. In fact, it’s not even possible or necessary because everything you need is available on the app. That’s why I’m so glad technology like Greenlight exists so my own kids don’t have to worry about being young and targeted when they’re traveling. With Greenlight, your kids can use the card in over 120 countries, which means they can chase their wanderlust to their heart’s content.

cat-alford-paris

Me as a 20 year old traveling in Paris. The Greenlight card would have been super handy on this trip. I had to exchange money or get cash out of an ATM everywhere I went.

3. You can control where your kids can use their Greenlight card.

Teenagers are hard enough, and when you give them cash, they can spend it on just about anything. With the Greenlight card, you can use parental controls to specifically earmark money for certain categories. You can even limit their use to specific stores.

This is a great way to get your kids used to using a debit card without worrying about them going over budget or spending it in stores you don’t approve of.

4. You can play a leading role & help them manage their money.

If you give your teenager cash, you can give them advice on how to spend it or forbid them from buying something with it. However, that’s the extent of your involvement with their spending.

The most exciting part about Greenlight is that you get to really interact with your kids and teach them how to manage their money better.

Like I said, my parents taught me how to manage money, but it was by default. I’m so looking forward to my kids using Greenlight because it’s truly interactive.

For example, your kids can use the card anywhere or just at the stores you approve. If they want to buy something over budget, they can send you a picture of it within the app, and you can approve or deny the purchase.

Think about your daughter going shopping and asking if they can buy a truly beautiful dress. They send you a picture, and it’s like you’re right there at the mall with them. If you agree it’s a must have, you can approve the purchase through the app and send more money automatically to their card.

This can also work in reverse. Don’t want your 13 year old to buy that bikini for their next pool party? Tapping “decline” when they ask if they can buy it via the app will send a pretty clear message.

Really, when it comes to teaching your kids about money, use the technology that’s available to you to help them.

You can sign up to get a Greenlight card here.

Talk to them about budgeting and spending often, and teach them that they can buy some things, just not everything. The more conversations you have with them about their finances, the better they’ll be able to manage money on their own in the future.

Catherine Alford is a nationally recognized family finance expert who helps educated, aspirational moms take on a more active financial role in their families. The thoughts and opinions in this post are a reflection of Catherine Alford, not of Greenlight as a whole.

It’s The Most Wonderful Time of The Year to Save and Budget

The hustle and bustle of the holiday season is upon us! There’s no better time than now to take up the topic of budgeting and saving with the family. The National Retail Federation forecasts that holiday retail sales will be up 4.2% over 2018, for a total of $730.7 billion spent on gifts for family and friends! Before your kids make their holiday gift lists, start conversations on how to set budgets and save up.

Bring on the budget

Setting a clear budget for the holidays and sticking to it will show your kids they don’t have to go into debt to have a holly jolly holiday season. The average American took on more than $1,000 in debt during the holiday season in 2018, so showing kids the importance of setting a budget, planning for the budget (calculating how much everything will cost for the season and how much they will need to save) and how to stay within the budget will serve them in the future. 

Make a list (check it twice)

Lists aren’t just for Santa Claus to find out who’s naughty or nice during the holiday season — they’re the perfect tool to help stay on budget when it comes to spending.

Before heading out to a store or logging onto Amazon, ask your kids to make a list of who they want to buy presents for and if they know what they plan to get each person (if so, have them add their gift idea to the list). To make sure your child doesn’t run through their holiday budget, ask them to look into the price of what they want to buy before they plan to shop for it.

Having a list to work through will keep shopping focused, both in-store or online, if you’re out shopping on Black Friday or going after deals on Cyber Monday, teach your kids focus is key.

Set a savings goal 

Within the Greenlight app, encourage your kids to set up Saving Goals, specifically for holiday. Perhaps they name it their Christmas Fund or their Gift Goals. Here’s how to set up a Saving Goal: 

  1.     Navigate to your “Save” tab.
  2.     Tap “Add a Savings Goal.”
  3.     Enter a title or description of what you will be saving for.
  4.     Enter a goal amount.
  5.     Tap “Add Savings Goal” to complete the set-up process.

Parents, remember that your kids need permission to spend their savings. As they move money out of their Saving Goals into a spending greenlight, they’ll send you a request. Be on the lookout for when it’s time for them to cross holiday shopping off their to-do list.

The season for deals and shopping steals 

After your kids have saved to meet their holiday Saving Goals, it’s important to talk them through smart spending. The holidays are a great time to teach bargain shopping (especially with a budget in mind). Here are the three shopping days you and your family should consider for deals and steals: 

  • Black Friday: The day after Thanksgiving is considered to be one of the busiest retail days of the year and it’s known for its big sales, discounted prices and often crazy in-store crowds. Black Friday is a good day to teach your kids how to navigate in-store experiences and what it’s like to shop with specific items in mind. It’s never too early to start shopping Black Friday deals, you can check out a comprehensive guide here.
  • Small Business Saturday: The Saturday after Thanksgiving (also known as Shop Small Saturday) is an opportunity to teach your kids about supporting locally owned businesses and small, unique brick and mortars in your neighborhood.
  • Cyber Monday: The Monday after Thanksgiving, known as Cyber Monday, is the hottest day for online retailers to offer some of their best deals for the season. Can’t make it to the mall on Black Friday? Consider shopping Cyber Monday deals from the comfort of your own home. 

Talking to kids about sales, coupons, discounts and the benefits of when to shop in-person and online can help create savvy shoppers for life. 

A little thoughtfulness won’t break the bank 

Gift giving often becomes a major focus during the holiday season, but not all gifts have to come from a store. Some of the most thoughtful gifts come straight from the heart. When your kids are making their holiday gift giving lists, make sure to have the conversation that small, thoughtful gifts can go a long way. 

Cookies, DIY ornaments, arts and crafts projects, handwritten cards and random acts of kindness to those we know and love won’t break the bank. And the warm and fuzzy feeling they bring about is what the holiday season is all about after all.

Add Parent-Paid Interest 

Parents, to encourage saving, consider adding Parent-Paid Interest within the Greenlight app. 

Greenlight offers parents the opportunity to set and pay interest rates on savings to demonstrate the magic of compound interest. Here’s how to set up parent-paid interest!

Get ahead for the holidays with Greenlight

Join Greenlight today to encourage wise saving and smart spending ahead of the winter holidays. Set up a holiday specific savings goal today!

The Fundamentals of Wants and Needs

Rome wasn’t built in a day and neither were financially-smart kids. The secret to setting your kids up for a solid financial future is to start with the basics. Deeper than the value of a dollar, budgets and why it’s so important to save lies the very basic lesson of: wants and needs are not the same thing. 

While the difference between wants and needs may feel straight forward to grownups, the concept can be complex to kids. Breaking down needs, wants, the fine line between the two and how to make trade-off decisions is critical for instilling money management and financial planning skills. 

Know your needs

Needs are essentials. When teaching your kids how to determine what a need is, it’s important to highlight what is a true necessity and what is a needy request —it’s all about perspective. Here are the categories we consider bare necessities: 

  • Shelter
  • Clothing
  • Food
  • Water

We find that getting as specific as possible when explaining necessities helps kids master the concept and begin to apply it in real-life trade-off decisions. 

Tell me what you want, what you really, really want

If you’re a parent, you’re probably used to hearing the rally cry “I want _____” from your kids. Wants can be described as the things your kids may circle in a magazine or put on an Amazon wish list for the holiday season. Greenlight mom Bonnie Koon even shared that her son once requested $10,000 via his Greenlight app. 

Wants are often inspired by peers, pop culture and hobbies. Here are some hopeful requests made by Greenlight kids. We’ll wait while you have a giggle or two.

When raising financially-smart kids, it’s important for parents to let their kids know that wants are a part of life but making smart choices around those wants will set them up for success. 

The gray area 

No lesson in needs and wants with a child is going to be easy peasy lemon squeezy, so it’s important to get specific for clarity’s sake when dealing with such an abstract conversation. 

Is ice cream a food? Yes, but ice cream is certainly not a necessity. Are Yeezy’s shoes? Yes, but $300 for a pair of shoes is not necessary or a requirement. 

It’s important for parents to let their kids know that it’s okay to want certain things. But making smart choices around those wants will set them up for success. In general, having a discussion around “wanting” things in life can be a powerful and inspirational discussion. You can want to make the soccer team. Want to be president. Want to have a family when you grow up. It is wants and dreams that put humans on the moon and brought us Beyonce. But when it comes to finances – you can’t always get what you want.

Being able to tackle these types of questions head-first will help kids understand the true meaning of a necessity instead of something they very much want, crave or think they need to meet the status quo. 

One way to help kids fully understands wants and needs would be to have them write a list of what they think are needs and what they think are wants. From there, break down needs — if they are a true necessity or not — and tackle what goes into getting a want (such as saving for that pair of Yeezy’s or picking up extra babysitting opportunities to help pay for the spring break trip to New York City). To take it a step further, discuss a budget of $1,000 with your child and include a mix of needs (rent/groceries/phone or car payment) and wants (a new iPhone/concert tickets/new shoes) to showcase that all needs must be met before money goes to wants. 

Want it? Save for it 

Wants and needs make a perfect opportunity to teach the importance of saving money to reach a goal. Want a new pair of jeans? Save for it. Have $100 extra each month after covering necessities? Add extra money to your savings goal to buy a new MacBook. These wants can act as perfect motivators to increase saving.

Setting up clear savings goals with Greenlight will not only teach kids how to set a savings goal and budget to meet their desired goal, but it will motivate them to save more in the long run. We’ll be talking more about saving in November, so stay tuned for tips from Greenlight families on how to have the right money talks.

Save with Greenlight 

Set up a Greenlight savings goal today!