Problems can start as soon as they leave home when student loans become available and credit card offers pile up. Most schools don’t teach kids how to manage their personal finances, so they often aren’t prepared to navigate the myriad financial decisions they will face in their lifetime. Parents can fill the gap left by curriculum by helping kids begin to make some of their own smart financial decisions while still at home.
In a classroom, financial decisions are theoretical. However, when managing real money, they feel the consequences. When children earn money from jobs or chores, they learn to connect spending with the work that preceded it.
They need guidance
Parents can offer kids a hands-on approach to learning to budget. For example, before shopping for gifts around the holidays, they might help their child create a budget to ensure they can afford a gift for everyone on their list. When grocery shopping, kids can pick and purchase their own food. They can learn to prioritize items and if name brand or generic brands make more sense for their budget, as well as learn about unit prices or consider sales tax.
Help for parents to help their kids
Many kids need reinforced guidance to make saving a regular habit. Greenlight lets parents choose an interest rate on savings — paid by the parents — that is well above any rate they would find at a bank. Kids learn about compound interest from seeing their own savings grow meaningfully.
We started Greenlight to help parents raise financially smart kids. With Greenlight, parents manage chores, automate allowances, set spending and ATM limits and encourage saving towards goals. Parents can provide their children with real world experience to help their future.
Tim Sheehan, Co-Founder and CEO, Greenlight Financial Technology, Inc., [email protected]
