The Wall Street Journal: 5 apps to help teach teens about money

Most tweens and young teens have a lot to learn about managing money. Fortunately for parents, a growing number of mobile digital tools are available to teach their children what they need to know.

These apps and mobile-friendly websites allow tweens and teens to make decisions about spending, saving and donating their money, while giving parents the option to monitor their children’s financial decisions and veto certain purchases or categories of merchants.

The goal in teaching children about money should be to give them enough freedom so they feel they are accomplishing something independently, while also having regular conversations about how to achieve financial goals and avoid costly mistakes, financial professionals say.

“You’re trying to give them the confidence needed to run their adult lives.”

Ted Beck, president and chief executive of the National Endowment for Financial Education

“The app is just a tool in the toolbox,” says Megan Gorman, managing partner at Chequers Financial Management, a registered investment adviser in San Francisco. “Teaching someone how to interact with money in a healthy and positive way requires more of a coaching aspect.”

Indeed, to be most effective, parents have to be heavily involved with their children’s finances, at least at the beginning, and then they can give children more freedom as they gain understanding, says Paul Gentile, president and chief executive of the Cooperative Credit Union Association in Marlborough, Mass., a trade group that provides its member credit unions with educational materials for children, among other services.

Regardless of the tools parents use, it’s critical to allow children to make some mistakes with their money, says Ted Beck, president and chief executive of the National Endowment for Financial Education, a nonprofit based in Denver. He suggests parents turn these missteps into teachable moments. “Avoid the gotchas, avoid the lectures. That’s not what you’re trying to achieve,” he says. “You’re trying to give them the confidence needed to run their adult lives.”

Here’s a look at some of the smartphone-friendly tools available to help parents teach teens and tweens about spending and saving.

BUSYKID: This is a mobile-friendly online platform (an app is slated for late September or early October) that focuses on teaching children to manage the money they earn by completing assigned chores. A subscription costs $14.95 a year per family.

Parents can link BusyKid to their bank account or to a credit card to move money into an FDIC-insured BusyKid account for their children. There’s a set payday—Friday—for children to receive their funds, assuming they have completed their chores.

Also read: How to make your teen into a millionaire

During the setup process, parents determine what percentage of a child’s weekly allowance can be spent and how much will be saved or set aside for charitable donations.

If a child wants money to spend and a parent approves, the money can be moved to the parent’s bank account, and the parent can then give the child cash or make a purchase for the child. Or, for an extra yearly fee of $5 per child, the money can be stored on a BusyKid debit card for the child to use. A child also can choose to buy a gift card from any of more than 200 retailers, with a parent’s approval.

For donations, children can choose from more than a dozen charities supported by BusyKid, again with a parent’s approval.

Children can also learn about investing by purchasing stock with the money in their savings, if a parent approves. Stocks in the account can also be sold. There are no transaction fees to buy or sell stocks. As of September, two children from each new family that enrolls on the platform receive as a bonus $10 each to spend on a stock or on fractional shares of a stock of their choosing.

BusyKid provides information including a company overview and performance charts for dozens of stocks.

CHORE CHECK: This is similar to BusyKid but offers a free version as well as a paid one. Chore Check’s free version allows parents to assign chores and children to request money for finished jobs. Parents can decide how much of the money their children earn can be spent and how much will go to savings and donations. Chore Check keeps track of how much each child has in each of those buckets.

For $9 a month (with the first month free), parents can link a bank account to Chore Check and load spending money onto as many as three debit cards for their children to use. Links can also be set up to move money into children’s savings accounts. Parents can see any purchases made with the debit cards and the card balances.

Chore Check can be used on any mobile device or computer using a web browser. As an app it is only available for Apple devices, but the company is planning an Android version for later this year.

Catherine Connors of Los Angeles uses the Chore Check app to replenish her 11-year-old daughter’s Chore Check card either twice a month or monthly, depending on how much she earns from chores. Connors won’t replenish the card unless she owes her daughter at least $20. While her daughter sometimes balks at the restriction, Connors doesn’t want her to approach earning and saving as if it’s an “ad hoc enterprise. I want her to think not only short-term but midterm and long-term—to be strategic about her earning, saving and spending,” she says.

“If we go to Target, TGT, +2.69% and she says she wants to spend the remaining $30 on her card, when it’s gone it’s gone, and we’ve had those conversations many times,” says Connors. “For kids, impulse control with shopping is an issue. But learning about the cost of impulse shopping the hard way is an important lesson.”

CURRENT: The Current app gives parents visibility into how their children are spending and saving; they get alerts when transactions are made, can see on a map where the store is and can see how their child has spent at that store over time. The app also allows parents to control their children’s spending by blocking purchases from specific merchants or categories of businesses.

A subscription, for $36 a year, includes a single debit card that parents can load with automated allowance payments or add to as they wish. Parents can create chores or other payment conditions. Teens can track their spending and savings as well as choose to donate to thousands of local and national causes. They can also use the app to request money from parents for one-off expenses.

FAMZOO: Using an app on an iPhone or iPad, or mobile-optimized screens on an Android device, parents can load debit cards for their children with an allowance or any additional payments. They can also bill children for their portion of shared family expenses and charge them for missed chores. Using FamZoo, children can request money, and parents can approve or deny the requests, by email or text. And parents can choose to set up instant text or email alerts about activity on a child’s card, which includes the amount spent, where it was spent and the remaining balance on the card.

Don’t miss: 10 things you should teach your kids about money before they leave home

The subscription fee varies depending on the payment option chosen. It’s $5.99 a month per family if paid monthly, but $2.50 a month per family if $59.99 is paid in advance for 24 months. Four debit cards are included in the price; families can request additional cards for a one-time fee of $2 each.

GREENLIGHT: The Greenlight app costs $4.99 a month for as many as five debt cards. Parents can choose to limit a child’s spending to just a few trusted stores, and they can get instant alerts showing where and when a child uses the card. Parents also can review a child’s spending by month or store at any time. Children who want to request extra money from parents can include a picture of what the money is for.

Melanie Cox McCluskey, a copywriter in Pittsburgh, likes the idea of having more control over her 10-year-old daughter’s spending. She’s a Greenlight subscriber and initially put $20 on a prepaid card for her daughter, an amount she replenishes as needed. Eventually she expects her daughter will add the money she earns from odd jobs so McCluskey won’t have to add funds as frequently. McCluskey says she gives her daughter the freedom to make spending choices, but feels more confident knowing she can make certain stores off-limits.

“It’s just as much for their benefit to learn about money as it is for my ability to have control over spending,” McCluskey says.

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