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.

Using your kids’ debit cards to talk about money this summer

The money talk — not as scary as the birds and bees, but still a big deal.  In fact, 49% of parents say they’re not sure how to explain money to their kids [1]. Enter: Summer Break. More time at home means more time to talk about money management. Follow along for some conversation starters and tips on how to have the money talk.

EXPLAIN WHY BUDGETING IS IMPORTANT

79% of Americans keep a budget [2], which is great. Budgets may be a bit more involved for grownups, but that doesn’t mean your kids can’t start learning the basics. How? Start off by explaining why budgeting matters. There’s a good chance they’re already wondering that.

Conversation Starter: “What’s something you really want but you haven’t had the money to buy?” Maybe it’s something you can’t fit into your parent budget, or maybe it’s something you think they should buy on their own. During the summer, there are lots of opportunities for your kids to make money — help them figure out how to manage their earnings.

BREAK DOWN COMMON BUDGETING TERMS

Fixed expenses and variable expenses — ring a bell? Maybe, maybe not. Either way, these are important words to teach your kids about budgeting. Break it down into Summer Break terms and they’ll get it.

Conversation Starter: “A fixed expense is one that doesn’t change. Like, our Netflix subscription. It’s the same price every month. A variable expense is one that does change. Like, a meal at a restaurant. It can go up or down, depending on where we eat.”

TALK ABOUT SAVING MONEY

Budgeting for Summer Break is one thing — saving for it is another. Instead of handing over a wad of cash and hoping they stash it away, make it a hands-on experience with a bit of fun along the way.

Conversation Starter: “Saving money lets you buy things that you might not have enough money for right now. When you add a little bit of money to your savings over time, it adds up so you can buy those things one day.” Tip: Help your kids make a savings goal (or better, lots of goals). Then, work together to plan out how they’ll reach that goal.

GIVE KIDS THEIR OWN DEBIT CARD

The fun part about the money talk is giving your kids their own debit card. Unlike a credit card, they can only spend what’s on it. The best part? They won’t realize that they’re learning valuable lessons every time they use their card — but trust us, they are.

With the Greenlight debit card and app, your kids can:

  • Set savings goals.
  • Learn to make trade-off decisions. Keychain or shark-tooth necklace? It’s their call.
  • Earn allowance through chores. Cool fact: Greenlight kids who earn allowance save 26% more. Woohoo!

A few other things you can do in your app:

  • Manage access to ATMs. Are they withdrawing a bit too much? Set limits.
  • Choose stores. You decide where they can and can’t spend. Gas only? Just at restaurants? Adjust the settings in your app.
  • Get real-time notifications and monitor their spend levels.

GET SET FOR SUMMER

Join Greenlight today and help your kids get a head start on budgeting for their Summer Break — and for life! Sign up now

[1] Investopedia.com [2] Debt.com

Everything you need to know about National Decision Day

For many high school seniors, May 1st is an important day: National Decision Day. It’s the day they decide what comes after high school — the first of many big decisions they’ll make for themselves. This year, it also marks a day in which their decisions are heavily impacted by the world around us. 

They did the work, took the tests, made it through the teenage years and now have their sights set on graduating high school. While you and your family explore different ways to commemorate this milestone (perhaps with video calls and virtual graduation parties?), we hope you can still find time to talk about the next chapter of your child’s life.

The new-age debate

Our Gen Zs live in a world of entrepreneurs and self-starters. They’re seeing success as seven-year-old YouTube influencers make millions and 16-year-olds start their own companies.

So it makes sense why your kids will have different thoughts and considerations surrounding the college talk. That’s not to say that they don’t want to go to college — they just may not see it as the only option. As parents, we need to listen to that so we can guide them toward a decision that we all feel good about.

To sign or not to sign? What to consider

The college talk isn’t just on National Decision Day — it’s year-round. It’s a good idea to stay in the loop with the merging views on the subject. When you delve into the college talk, you may come across split views on a few things: 

Student loans: 

Because every financial situation is different, student loans are a hot button for many parents. If you and your kids are thinking about student loans, take time to explore every avenue and talk about how it will impact them throughout and after college. 

In 2018, the average individual student loan amount was $29,200. Loans may or may not be an option for your family. Either way, National Decision Day is a great opportunity to talk through the numbers with your soon-to-be grad. 

Public vs. private vs. community:

The good news is we’ve got lots of options. The not-so-good news? Well, it’s hard to decide! It’s no secret that most private schools come with a heavy cost and community schools are typically the most affordable. Public schools tend to sit somewhere in the middle of the two. 

Talk to your kids about finances — how they’ll be managing their money throughout college, pros and cons of an expensive school and what matters most to them. Your conversation could bring you to a cost-benefit analysis (bonus!) or it could spark up a new outlook on the entire decision-making process. 

Career analysis: 

Anyone else feel like their kids are too young to decide on a career path? In many ways, they are. That being said, they may have a different perspective. 91% of high schoolers believe they know their dream job, according to a survey done by EY and Junior Achievement. 

To them, a career is fun, exciting and adulty (their word, not ours). You know better than them that careers are not just about fun — they’re about financial security and stability. 

The transition out of high school is a prime time to have an open, honest conversation with your kids about this. You have the best insight into your kids’ strengths and interests, and you can use this knowledge to help them choose a path that will give them the biggest return on investment. (Props to you if you can make ROI sound fun!) 

Looking for a way to start the conversation? Try these: 

“Are we there yet?”

You’ve got a lot to think about, but no need to stress about it. National Decision Day is an exciting time for you and your kids. No matter what path they choose, the most important thing is that they have you. 

And… they have Greenlight! They may be growing up, but that doesn’t mean it’s time to stop helping them make wise money decisions. If you haven’t already, join Greenlight to keep your kids financially-healthy and happy throughout this next chapter of their lives.