With the aim of establishing healthy financial habits for kids, Greenlight Financial Technology is making debit cards easier to access for parents and their children. Whether you’re faced with the situation of not having any or enough cash for your child when they need it, or you’re wanting to keep track of your child’s spending habits, Greenlight has introduced debit cards that allow parents to create an account on behalf of their family.
For a monthly fee of $4.99 for families including parents and up to five children, money can be designated for spending saving and giving funds. The Greenlight debit cards are targeted for children ages 8 to 22 and also do not have a checking feature attached to it. With an account, parents can chose which stores their children can use the cards and how much they can spend. Families can have a $35,000 maximum balance per family, with those balances being insured by the FDIC.
In the future, Greenlight plans to add a feature that will let children invest in stocks, bonds, mutual funds or exchanged-traded funds, with the approval of a parent before the transaction is sent. Although there is no interest paid on the balances, parents can elect to give their children a “parent-paid interest rate” to help them save more money and having an account will not affect a child’s credit score. Along with Greenlight, companies such as GoHenry and American Express are also working on developing debit cards for minors.
Tips to help your kids save money:
- Create savings jars: Using four jars, label them as “spending bank,” “saving bank,” “investing back” and “giving bank.” Have kids place money in each jar for future use.
- Set savings goals: Set monthly savings goals together with children.
- Cut expenses: Help kids keep track of their money by writing down any money they spend and why they spent their money.
- Shop smart: Have children pay attention to the prices of items and help them find better deals if possible.