Can an App Make Your Kids Smarter About Money?

It’s a aggravating chance. Many of us fear that when our kids use cash on-line or in an app, it’s not the identical lesson as taking $5 out of their wallets and handing it to another person. Does cash on a display screen really feel the identical as cash in your hand?

So far, these embracing these apps have discovered a few of these fears to be overblown. Parents say the apps assist their youngsters maintain observe of what number of knickknacks they purchase, whereas creating methods to show cash expertise over time.

Each app has particular parental-oversight instruments, so it’s on you to remain concerned.

Monica Romer’s 14-year-old daughter, Ryleigh, was consistently dropping money, so Romer determined to create an account for her on mobile-payments service Cash App. She can see her daughter’s transaction historical past on the app and Ryleigh pays for issues with a Cash App debit card.

Ryleigh and her sister, 10-year-old Serenity, typically stroll to their native Wawa retailer in Jacksonville, Fla., to purchase snacks after receiving their allowance. Before she had the app, Ryleigh would marvel why she was broke after only a few days, says her mother.

Once they began utilizing Cash App, Romer says she started reviewing purchases with Ryleigh and asking questions like, “Did you really want to purchase this?”

With the app, Ryleigh says, “I can see how much money I’m really spending.”

The teenager has one other drawback with paper cash: “I don’t like paying with money as a result of it’s a must to depend it whenever you go to the counter.”

No more birthday checks

Numerous parents tell me that when their kids receive cash or checks, they ask their parents to deposit them and then transfer the money to them digitally.

A survey of 1,000 U.S. teens conducted last year for Citizens Financial Group and Junior Achievement found that 57% of teens said their parents give them cash, down from 71% in 2019.

The tedium of being their kids’ bankers has led many parents to get other relatives on payment apps. It’s not always easy to get all generations to go cashless, as I reported earlier.

Before Romer knew about Cash App, she helped her mother-in-law sign up for PayPal, so she could send birthday money to the girls. Now, rather than walking her mother-in-law through another app setup, Romer links her own PayPal account to her Cash App to transfer the money. Other relatives have signed up for Cash App.

There’s also the benefit of tailoring the app to your child’s needs. Some kids struggle to save money while others misplace it.

In 2021, before Ryleigh had Cash App, she went to a church convention and blew through her spending money, about $125 in cash. This past winter, she brought a debit card loaded with $100. She came home with $30 left over.

“This has helped her rein in her smaller, sillier spending,” Romer says. “She’s extra aware.”

‘You just stick the card in’

Reviewing spending in apps gives parents teachable moments with their kids about accountability with money.

Jennifer Anderson recently began using Step, a kid-friendly financial app, with her 11-year-old daughter, Baylee, and 9-year-old son A.J.

“My daughter has a hard time saving,” says Anderson, of New Market, Ala. “She’d put cash in several wallets and neglect the place it was.”

The Andersons opened a checking account and told their kids that half of their allowance would go to savings and half would go into Step for them to spend via debit cards.

Kids like going cashless because it’s easier to buy things with debit cards.

“You just stick the card in and it’s done in five seconds,” A.J. says.

Mobile banking apps

Some banks provide youth accounts that may be monitored on cellular apps by dad and mom and embrace debit playing cards, together with Chase, Bank of America and Capital One. There are additionally apps designed particularly to assist youngsters study cash administration:

Step

Fees: There aren’t any buyer charges—Step makes cash from transactions whenever you spend. You nonetheless would possibly incur some ATM charges exterior Step’s community.

Parental oversight: Parents or guardians can sponsor minor accounts by making a separate account from which to switch cash. Parents can view their youngsters’ steadiness and exercise, add cash and freeze their debit card.

Greenlight

Fees: Monthly subscriptions vary from $5 to $15 for a household with as much as 5 youngsters.

Parental oversight: Parents can ship cash, set debit-card spending limits at particular retailers and freeze spending. Parents can create lists of chores within the app and pay youngsters for finishing them. Kids may make investments cash from throughout the app, with dad and mom approving each commerce.

Cash App

Fees: Cash App, which is owned by Block, affords commonplace deposits to your checking account and immediate deposits to your Cash App debit card. Standard deposits, which take one to a few days, are free. Instant deposits are topic to a payment of as much as 1.75%.

Parental oversight: If you might have a verified Cash App account, you may sponsor an account for anybody ages 13 to 17. You can observe your teenagers’ exercise within the app and disable their entry to the debit card. Parents or different adults overseeing a sponsored account should approve youngsters’s requests to entry inventory and bitcoin buying and selling.

Venmo

Fees: There aren’t any charges for sending folks cash out of your Venmo steadiness or for receiving funds from different Venmo customers. There are out-of-network ATM withdrawal charges, charges for check-cashing and charges for transactions with companies.

Parental oversight: Parents can lock and unlock the teenager debit card, monitor their youngsters’ account balances and obtain notifications on their account exercise. All teen transactions on the PayPal-owned app are set to non-public by default; solely dad and mom can replace the privateness settings.

Write to Julie Jargon at Julie.Jargon@wsj.com