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With apps, parents teach kids how to spend

They can monitor and control spending
Jonathan and Erin Kraftchick started out by paying their two children’s allowance the old-fashioned way, using paper money. “I tried the cash thing,” said Mr. Kraftchick, an accountant and financial-literacy advocate. First, they used glass jars, then switched to a system that involved slipping money for different purposes into separate paper envelopes, for each child. But keeping up with multiple envelopes became unwieldy. “It’s a lot of hassle,” Ms. Kraftchick, an artist, said with a laugh. So when Jonathan Kraftchick read about a “smart” debit card called goHenry this year, he quickly signed the family up for an account. Now, the children — Reece, 8, and Caris, 7 — each have a card, which their parents manage using an app on their phones. They have $1 for each year of age, per week, automatically transferred each week to the cards, which the children can use to buy items like snacks. They can also get more money transferred by going above and beyond — like extra time spent practising the piano. They can check their balances on an iPad. Ms. Kraftchick said they were even learning to round up prices to include tax. The Kraftchicks are part of a growing group of busy parents who are trying out app-controlled debit cards to give their offspring allowance, manage chores and teach them about money. Some banks have long had accounts aimed at children and teenagers, and many families use prepaid debit cards — rather than traditional debit cards, linked to a checking account — as a way to help children manage money. But the newest generation of “smart” debit cards are managed by advanced mobile apps that give parents detailed control over how much the young people spend — and even where they spend — with a few taps on a phone. In addition to goHenry, which moved into the U.S. this spring, the cards include financial technology startups like Greenlight, backed by Amazon and others, and Current, financed in part by an arm of Fifth Third Bank. Details vary slightly by card, but in general a parent establishes an account or “wallet,” linked to their traditional checking account. The app draws money from the bank account, and the parent transfers funds electronically to the child’s card.NY Times
Source :  https://www.thehindu.com/todays-paper/tp-life/with-apps-parents-teach-kids-how-to-spend/article25533891.ece

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