It’s now more important than ever to educate children on the importance of savings. Talking with them at an early age is critical for them to learn financial literacy. 69% of parents gave an allowance to their children (ages 4 – 14) in 2019 and the average amount was about $10 a week. These children did a great job of not spending all of their money, as they saved nearly 42%, while their parents saved just 8% of their income! Just speaking to your children about money isn’t enough. Parents should be leading by example. According to a 2019 T. Rowe Price survey, 46% of parents had no emergency savings. It’s important to practice what you preach. If you want your children to become good stewards of their finances, parents should do the same.
Gone are the days of the piggy bank. Today, kids can manage their finances with prepaid debit card apps that help them track their spending and offer customizable oversight features for parents. Kids can split their allowances into different pots – savings, spending, donating, etc – and parents can set limits on ATM withdrawals.
How it Works
As we have examined, prepaid cards are a new way to virtually spend money from a phone’s native wallet. They can be spent anywhere Visa or Mastercard are accepted. Since COVID-19 was introduced to the world, wallet spending has exploded, as consumers shy away from cash, and merchants increasingly push digital payments in-store.
There has been an equal increase in the use of prepaid debit card programs for kids. One such example is an app called Greenlight. Using this card, parents can pick the exact stores where their kids spend money, approve and freeze any spending, get real-time spending, and automate allowances. There are dozens of companies launching similar programs.
Hydrogen’s Prepaid Card Programs For Kids
To offer a solution like Greenlight is simple on Hydrogen. First, get approved by one of our prepaid card partners, such as EML, Marqeta, Railsbank, and others. Next, Hydrogen offers a data categorization engine that allows you to label spending, and set card controls for merchants and categories. Hydrogen also offers an automated savings, goals based savings, round up the change, overflow, and budgeting setting. These features can be added through our APIs, or our no-code components UIs.
To start creating a prepaid card program for kids, click on the button below.