Iconic piggy bank gets digital makeover: Money apps teach kids to save
Even the iconic piggy bank is getting a digital makeover.
Feeding the piggy has long been a down-homey, tried-and-true way to teach kids how to save money. Now these lessons increasingly can be found on digital devices with money apps designed specifically for children.
And why not? The average age for kids to get their first smartphone is about 10, according to research firm Influence Central, so the financial apps connect with kids in their comfort zone.
“It's where they are and what engages them,” says Ted Gonder, co-founder and CEO of Chicago-based Moneythink, a nonprofit that mentors young people and develops money apps to use as teaching tools, finding them more effective than dry lectures or textbooks.
Most of these apps act like virtual banks, offering lessons on how to budget and sock away money for spending goals. They tend to emphasize child-parent interaction; a common feature tracks chores the child needs to accomplish before receiving allowance.
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A few banks also offer apps for kids; the same money lessons apply, but children can’t actually make financial transactions.
Most apps, however, fail to address the most important consideration a parent should have when teaching a child about money — making a distinction between wants and needs, says John Buerger, a financial planner and president of Altus Wealth Solutions in San Luis Obispo, California.
“All we’re looking at in most app cases is, ‘You work, you get paid for your allowance,’ and that may be problematic from a philosophical standpoint. Your chores are your chores [and] you do them for your family,” Buerger says.
Still, Buerger praises financial literacy apps for starting conversations with kids about money. “I like kids paying attention to money as early as 5 or 6,” he says.
If you’re looking for such an app for your child, Buerger advises picking one that incorporates interactive features or gamification to help hold a child’s interest.
James DeBello, CEO of mobile deposit technology company Mitek in San Diego, has another take: Keep it simple. The best apps, he says, “require fewer steps to get from point A to point Z.”
Children are learning about money earlier than ever, “not through their school typically, not through the traditional bank,” DeBello adds. “They’re self-learning through their phone.”
Some popular financial education apps
Bankaroo, developed by an 11-year-old and her father, helps children track their savings and what they’re owed for chores; aimed at ages 5 to 14. Free for iOS, Android and Amazon devices.
Parents can push alerts to children to get chores done and set up automatic allowance payouts and rewards when goals are met. $3.99; iOS only.
PiggyBot has some neat features, like the ability to post photos of items your child is saving for. Aimed at ages 6 to 8. Free; iOS only.
Union Bank’s app for ages 6 to 11 lets kids track chores, earnings and spending and earmark money for charity. No financial transactions occur. Free for iOS and Android.
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Juan Castillo is a staff writer atNerdWallet, a personal finance website. Email:jcastillo@nerdwallet.com. Twitter:@JCastilloNerd.
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