Ditch the Piggy Bank to Raise Smarter Spenders and Savers

By Taylor Burton, Founder, Till Financial

The use of financial apps and technology exploded last year. These days, we do a lot more than pay our bills online: online shopping is the default, contactless payments are incredibly popular, and adults of all ages are using apps like Venmo and CashApp. Financial technology (or fintech) has transformed the way adults pay, buy, sell, invest, gift, and save.

Still, when it comes to teaching our kids how to do these same activities, too many parents go to what we knew growing up—the old-fashioned piggy bank. Some of us have tried cash envelopes for older kids, usually divided evenly into giving/save/spend. The early adopters among us may have even tried to find a family banking app—and, most likely, gave up because it was an overwhelming task.

Okay, I’m exaggerating, but only slightly. 

The reality is most parents aren’t sure when to start teaching their kids to be financially responsible, much less how to move money management to a digital format. I often hear from parents that they don’t know where to start; they have multiple kids of various ages and don’t want to manage separate online tools and apps. Decision paralysis takes over, and parents end up cobbling together analog solutions—spreadsheets, piggy banks, rudimentary online tools—until their kids are old enough to open their own accounts at the local credit union.

But just like we’re no longer balancing our checkbooks via a paper ledger or getting paid in paper checks, we can’t continue to have our kids stuffing change into little ceramic pigs or dividing paper money into a few envelopes tucked away in the kitchen. I believe we, as parents, have an obligation to teach our children how to be smart spenders and savers. And, because the financial world is increasingly digital, leveraging technology where appropriate can help us impart those lessons, enabling us to truly prepare our kids to become financially savvy, fully functioning adults.    

So, how can you make the leap from piggy banks to digital banking? Here are some considerations and tips that might help.

Can the App Grow With Your Kids?

Can you find one app, for all your kids, for all their ages? Yes. Simplicity wins here because you aren’t really going to be able to manage three different apps for three different ages. That said, look for full platforms focused on serving entire families, not just an app that provides access to general online banking tools. 

Parents, you want your children to have independence and learn, but not get into trouble. So be sure the solution gives you a clear picture of your kids’ spending and that you’re able to reward and reinforce good habits. The platform needs to offer capabilities to keep pace with its development. 

Is It Offering a Hands-On Learning Experience?

According to the Learning Pyramid, practicing by doing is the second-best means for retaining information. That said, this shouldn’t be about parking money in an account and leaving it there. Seek technology that also provides a hands-on experience. This can provide a wealth of learning opportunities to help guide young minds (and probably a few adult ones, too) on the proper ways to spend, save, and budget.

Does It Do More Than Save?

Most households are aiming to save 20% of their income, but nearly 70% of adults have less than $1,000 in savings right now. So yes, saving is important, but so is learning how to spend responsibly. And perhaps the most important benefit of more sophisticated platforms is not just the way they help create good savers, but how they grow smart spenders.

Apps only focused on savings aren’t modeling real-world behaviors. Make sure there are clear opportunities for hands-on spending, as well as saving and managing earnings. By letting kids practice the trade-offs between spending and saving, they’re modeling real-world behaviors. Parents are often amazed at how responsible their children can become as they begin evaluating if purchases made using their own money are actually worthwhile.

Is It Free or Nearly Free?

There are some great family banking tools out there that are free or close to it, so nearly everyone—regardless of socioeconomic status—can participate in building better financial habits with their kids. Also, the best platform and apps will feature something like a fee-free app and debit card, accompanied by parental oversight. This provides the best of all worlds, enabling kids to gain from experiential learning without falling in a hole due to banking fees.

Can Your Broader Community Contribute?

None of us got to where we are today alone, and that will be the same for our kids. For big items, grandparents, aunts, uncles, close family friends, and other trusted adults can help younger ones identify and attain specific financial goals. Giving this close community the ability to "gift" to kids directly using the app brings trusted adults directly into the experience.

Whether your child is saving for a new skateboard, car, or a post-grad trip, allowing family and close friends to contribute is a win for your kid and for the extended family that only wants to see your child enjoy a healthy financial future. Let them share the love and a host of invaluable lessons that will last a lifetime.

Taylor Burton is the founder of Till Financial, the first collaborative family financial tool that empowers kids to become smarter spenders. It replaces awkward family conversations about money with real actions and experiential learning, teaching kids how to spend wisely with its fee-free app and debit card. For more information, please visit www.tillfinancial.io.

Image Sourced from Pixabay