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.
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?
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!