Digital Money Boxes: Can help kids budget, but come with monthly fees and additional fees
The way children manage their pocket money is evolving with a new line of phone apps that can help them budget using a “digital” piggy bank.
The days of young people hoarding coins in a glass jar or jar are long gone, along with the idea of opening them to buy comics and candy.
Today, many are encouraged by their parents to use apps that help them learn to budget, as well as allow parents to keep tabs on their spending.
One of the most popular is Gohenry. It’s also one of the more expensive at £ 2.99 per month, but it includes a prepaid contactless Visa card that can be used by children aged six and over under parental supervision to purchase cards. goods and services – online or in a store.
Popular: Apps, the fees for which are shown in the table below, come with prepayment cards
The service also blocks purchases on certain websites, such as those involved in gambling or pornography. Additionally, it can be used to access cash at an ATM.
Pocket money is automatically transferred to the card on a regular basis via bank transfer, while there is also a feature that allows parents to list the tasks they expect from their child, such as tidying up their room. When finished, parents can add extra money to the card.
The first monthly top up is free, but after that there is a charge of 50p. Kids can also set savings goals in the app and set aside a percentage of their weekly spending money to help them reach their savings goals.
The cards come in a range of attractive designs – from a pineapple wearing sunglasses to a soccer player. Cards do not allow overdrafts and parents are informed of all expenses.
Another similar application is RoosterMoney. Children aged four and over can use a free “Star and Reward Board” feature, learning how good behavior can lead to financial rewards – without any money changing hands.
But from the age of six, the application allows children to access a prepaid Visa card.
The RoosterMoney app monitors savings and spending and can be viewed by children and parents.
The full app service with the card costs £ 24.99 per year, which equates to £ 2.08 per month. Parents can add money ten times a month for free, but after that they pay 50p per top-up.
The Osper app offers a prepayment card – Mastercard rather than Visa. It works like other apps in that parents can add money to the card and keep tabs on how their child is using it.
It costs £ 2.50 per month and does not charge any fees for regular automatic payments made to the card by direct debit. Any ad hoc top-up costs 50 pence.
Nimbl offers an app with a prepayment Mastercard for £ 2.49 per month. The app includes a handy feature for thrifty youngsters willing to set aside £ 5p to £ 5 in a separate savings jar which is displayed on their app. There is no charge for card reloads.
Damien Fahy, founder of the Money to the Masses site, is a fan of these applications. He says, “All of these apps provide a great introduction to financial budgeting for kids.
“But if I were tough, I would say they fall short in one key area, which is understanding the true value of money.
“This is often only acquired through financial education in schools and habits instilled by parents. ”
Fahy also points out that although the apps introduce the idea of saving on rainy days, they do not pay interest on money intended for savings.
He adds, “One of the features I love about apps like Gohenry is being able to write a task on the app as a parent – like emptying the dishwasher – and set the payment for doing that chore. . ”
While the apps don’t seem expensive, the cost of what is actually a prepaid card hooked up to a fancy app can run up to over £ 30 a year. There are also the additional costs to consider.
So only buy one of these apps if the goal is to teach your kids good financial habits. The only financial winner, at least in the short term, is the application provider.