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 . 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 , 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
Today, it’s not surprising that Americans have shifted from the traditional use of cash to more modern methods of payment like debit and credit cards. According to Fundera, 70% of consumers prefer using cards as a form of payment and 54% prefer using debit cards.
Debit and credit cards provide convenience, more security than cash and are accepted nearly everywhere. It’s safe to say that while cash may not be going away, teaching children the basics of what credit and debit cards are now will prepare them to use cards responsibly in the future.
Prepare them for the reality of credit cards
A credit card is a form of payment issued by a bank or business that allows the holder to purchase things on credit. When making purchases with a credit card, you promise to pay back the money you owe (plus any interest!) at a later date.
When you carry a balance over month-to-month, the lender charges you interest on top of the amount you owe. Carried balances and interest can add up quickly and many families find themselves in a position where it’s tough to pay credit cards off.
In fact, 41% of America’s households have credit card debt. It’s important to introduce your kids to the concept of credit cards while they’re still in the nest – that way, they are prepared to carry one later in life.
When it comes to teaching your kids, we recommend starting their money management adventures with a debit card. This protects them from overspending because they can spend only the money they have, and allows them to build healthy habits early before they enter the world of credit.
Teach them to manage money with a debit card
Debit cards provide more security than cash and fewer worries about debt than a credit card. A debit card is a form of payment that deducts money directly from a bank account to pay for a purchase. With debit cards, owners can have easy access to their available funds and can often also put money aside for something special using a savings account.
Kids need to learn how to manage a debit card just like they need to learn how to drive. Whether your child runs their own lemonade stand during the summer, starts their first job or gets an allowance, a debit card can help kids learn to manage balances, save money, and more!
How Greenlight helps
Greenlight helps kids learn how to manage money and form strong healthy habits that will serve them as adults. According to Greenlight CEO Tim Sheehan, the reason Greenlight is a debit card is to “help kids learn to effectively manage the money they’ve earned, as opposed to spending money they may not have.”
Parents are the primary account holders and have the controls to choose where their children can use the card, manage chores and allowances, set parent-paid interest rates on savings, and more. Kids are able to monitor their balances, create saving goals, and learn how to make financially-smart decisions in a safe environment with their parents’ guidance.
Mistakes are just mistakes
With Greenlight, there is no chance for a child to overdraft or overspend since we decline any purchases greater than the child’s available balance. Mistakes are just mistakes! Parents get alerts when kids try to spend more than they have to spark conversations about budgeting and wise spending.
Parents are able to allocate funds to their child’s “Spend Anywhere” account or choose specific stores where kids can spend and how much they can spend. They can even help their child create a savings goal and contribute money to meet that special goal.
Ready to teach your child how to manage money responsibly?
Join Greenlight today to start adventures in personal finance with your kids!
Studies have shown that financial health is strongly connected to physical and mental wellness. There’s no better time than now to start routines that set your kids up for financially-healthy and happy futures. Let Greenlight help you set new year resolutions that you’ll actually keep to jumpstart your progress.
Resolution #1: We all need a bit of balance (tracking)
Our goal at Greenlight is to make sure all kids are empowered to make financially-smart decisions. We think empowerment starts with knowledge — working with kids to make sure they understand how much they earn, how much they spend and how they should save.
Tip #1 is all about making sure kids take the time regularly (dare we say it, daily?!) to track their spend history and account balances. This new year resolution will naturally spark conversations around trade-off decisions, teaching your kids responsibility in budget management.
Within the Greenlight app, kids are able to monitor their spending, earning, saving, and giving history. This allows kids (and parents!) to track:
- How much to expect in allowance
- How much is available to spend
- Progress toward their saving goals
“I have two teens (13 & 14). Being able to see their spending and balances digitally via the app has made them much more mindful of how and when they choose to spend their money.”Antoinette K, Greenlight mom
Resolution #2: Save! Save! Save!
We know it’s hard for kids (especially the young ones!) to understand the difference between wants and needs. Starting kids out with a savings account early can teach them to save for what they want and be prepared to cover what they need because unexpected things happen.
Consider mapping out a monthly plan with your kids to help them articulate, save for and reach their goals.
The most popular saving goal for Greenlight kids in 2019 was a car!
If your kids earn an allowance based on grades or chore completion, write out how much each grade or task is worth. That will help them calculate what they need to do to accomplish their goals.
Parents are also able to help their kids reach their goals by setting aside a portion of allowances into their child’s Greenlight save account, helping reinforce wise saving habits.
Setting up saving goals within the Greenlight app helps kids visualize what they’re saving for and regularly track their progress.
Greenlight kids who create saving goals save 29% more than kids who don’t.
Once a week, consider having a family meeting to talk about how close your kids are to reaching their goal. Reviewing their spend history can help kids rethink a plan for the next week on how to spend less and save more. This regular routine can turn into a long-term habit that magically reduces the number of times you get asked for money.
Resolution #3: Watch savings grow with Parent-Paid Interest
After you get your family into the habit of saving, it’s time to learn about how to make your savings grow. Greenlight helps teach the power of compound interest by offering parents the ability to pay a parent-paid interest rate on top of their child’s savings.
On average, Greenlight families set a parent-paid interest rate of 18%.
Once your kids understand the concept of compound interest, you can set your parent-paid interest rate to a more realistic one and have conversations around what grownup savings accounts typically earn.
Resolution #4: Have you done your chores?
Chore routines can be a great way to show your kids that money has to be earned. A recent poll of Greenlight parents showed that 73% give allowance, and 47% say their kids have to earn it.
Use the beginning of the year to reassess your family’s chore routine. With age may come new responsibilities, changing the chores typically assigned to your kids.
However, if ever, you choose to reward your kids for chores, Greenlight can help with task management. With the Greenlight app, you can set one-time or weekly chores based on the routines you set for your family.
In 2019, Greenlight helped kids finish 1.8 million chores!
If your child does dishes weekly, Greenlight allows parents to assign tasks and regular deadlines. If your child contributes to other household responsibilities by cleaning the gutters once a month, one-time chores may be assigned with an optional monetary reward upon completion.
Whatever your goals, Greenlight is here for you.
Greenlight is here to help your family feel empowered to talk about money and form smart habits with all the tools to raise financially-smart kids. Not a Greenlight member? Sign up today!
XBOX, PlayStation, Nintendo, Steam. If you’re a parent, you’ve probably heard your kids talking about these video game consoles and platforms along with their favorite games like Madden, Fortnite, Mario Kart and Minecraft. With 75% of American households having at least one gamer in the house, we’re not surprised by the wave of Greenlight families sharing their gaming experiences with us.
Whether your kids prefer mobile gaming or they kick it old school with Nintendo, video games can quickly become a favorite pastime and a recurring cost. Americans spent $43 billion on video games in 2018 and the numbers keep growing, which is why we think video games can be leveraged as an excellent tool for parents to motivate their kids to make smart money decisions.
Knowledge is power
With so many different consoles and video game franchises on the market, teaching young gamers to do their research develops smart habits that can apply to future large purchases. Important questions to consider include:
- How much does each gaming console and individual game cost?
- What are the differences between each video game platform and what makes them special?
- Which games interest them the most? Which platform is the right fit?
In Greenlight mom Natalie Jensen Young’s house, her three kids (ages 14, 16, 18) make the best decisions for their individual gaming interests.
“My kids each have different gaming preferences. One loves his Switch and the Xbox. One loves his PS4 and Xbox. One loves her Wii U. They all love the 3DS. They have all saved up for these machines, doing their research, and finding out which games are on which platforms. They get a set amount of money each week for jobs completed around the house — they save up for the games they want.”
It’s never too early to study the fine print
Since video games often feature in-game purchases for accessories or level boosts, it’s critical to teach kids vigilance when it comes to downloading games with monthly fees. By linking a Greenlight card to these in-game add-ons, kids gain visibility into miscellaneous charges that are often associated with mobile purchasing while parents protect their own credit cards from these charges.
“My kids have the cards attached to their XBOX, PC and phone accounts. It’s so much better than having my card attached and them accidentally buying stuff. Plus, it taught them to be careful of things like recurring charges or hidden fees. They are much more careful of what and how they buy now,” shared Greenlight mom Alysson Browning.
Level up with a video games budget
Due to the fast pace of the gaming industry, new trends can keep prices steep. Use these updates as an opportunity to talk about a magical thing called budgeting. Discuss how your child can’t get the latest game in their favorite franchise without the proper savings or budget.
With Greenlight, parents have the ability to limit how much kids spend on games, which helps eager gamers from going overboard.
Ohio mom Heather Renee Gilbert shared the secret to her game-loving son’s success.
“My son uses his Greenlight card for Xbox games. I created an Online Gaming greenlight for him where I put money specifically for that purpose into it. He earns that money with grades at school and his behavior. Having the greenlight specific for gaming is amazing because if I didn’t set a limit on what he spent on games, he would blow through all the money I gave him on just that. Now he knows exactly what he can spend on his games. No game money in the greenlight means he can’t spend more than what he has.”
Talk that gaming and finance talk with your kids
Raising financially-smart kids sometimes means getting crafty with teaching opportunities. The more relevant the topic, the more engaging the conversation can be. If your kids are into video games, why not start money talks around one of their favorite things?
Greenlight can help
Sign up your family for Greenlight today to explore your own lessons in earning, spending, saving and giving.
Greenlight is all about helping parents raise financially-smart kids, which starts with providing children with opportunities to make smart decisions about their money. The child version of the Greenlight app helps introduce those opportunities and sparks natural conversations between parents and kids.
Kids can monitor their own balances
With the trend toward more digital purchases, kids no longer see their wallet getting smaller as they spend cash. Greenlight gives your kids the ability to check and manage their balances to make sure they’re within budget.
Greenlight tip: We recommend setting time to talk with your kids whenever you give them allowances. Together, discuss distributions of allowances between Spend, Save and Give and discuss why you’re making these choices.
Kids can send requests, also known as Greenlights, when they want to make purchases outside of their Spend Anywhere account or any of the Greenlights you currently have set up.
For kids, this gives them a path to request money if they’re in a pickle. And for parents, this gives you the ability to safely distribute funds for purchases you’re comfortable with.
Showcase the power of saving
Saving for short and long-term goals can be challenging, especially when the satisfaction of taking a full piggy bank to the local teller is a figment of banking past.
With the Greenlight app, kids can see how they’re progressing toward saving goals line-by-line. They can watch that money grow as you add Parent-Paid Interest and see balances update in near real-time. Bet your old piggy bank couldn’t do that. 🐷
Greenlight kids save 3x more than the national average. It’s never too late to kick off conversations, and present kids with real world scenarios to encourage saving.
How to set your kids up
Don’t have Greenlight yet?
Summers are busy. Between visits to grandma, beach trips, summer camp, and the inaugural summer job (!), your kids may be spending tons of time away from home. Throughout the coordinated chaos, Summer offers great opportunities to continue money talks with your kids.
Many families go on summer trips. In fact, 68% of you fine American families* will hit the road before school starts.
Use this as an opportunity to talk to your kids about the value of saving. Discuss the tradeoffs you made throughout the year to fund your excursion and talk about the specific costs associated with you trip.
Scholastic has a lesson with a couple handy worksheets – including a trip cost calculator in case you need a bit of help. (Don’t worry – we also learned a thing or two.)
For parents of teens, this summer may be the first one employed, and may it be the first of many. Before your kids pull out their Greenlight card to spend all of their Friday paycheck on Fortnight Battlepacks, remind them of the practice of saving.
Work with them to develop a distribution plan for their paychecks. How much will they put into Save, Spend and Give accounts on a regular basis?
The first job is probably the first time your kids encounter the not-so-simple world of income taxes. And before you click away from this page in search of safer waters, know that the earlier you approach the subject of Uncle Sam with your kids, the more prepared they’ll be when the leave the house.
Going over their pay stub is a great way to show teens how taxes impact their take-home pay. Talk with them about the purpose of social security, medicare, federal, state and local taxes. The Consumer Financial Protection Bureau has a simple guide to the anatomy of a paycheck that may help. Remind them that smart budgeting (see savings tip above), helps you account for the tax you pay.
(Side note: did you know teens can directly deposit their paychecks into their Greenlight accounts?)
Back to School
In 2018, Deloitte estimated families spent $510 per child**, on average, on back to school expenses. Between clothes, electronics and general supplies, that’s a hefty penny. And also an opportunity to reinforce the conversation of budgeting, especially when it comes with the price tag of a new school year.
Later in July, we’ll talk about how to instill healthy money habits into routines as the kids go back to school. Follow us on social media for the latest tips and tricks about money talks and recent updates to the Greenlight app.
Don’t have Greenlight yet?
*2019 AAA Travel Survey
**Deloitte 2019 Back to School Survey