How can you educate your kids to spend their money wisely, while also teaching them the foundational skills of investing their money? Instead of simple conversations about what to do and not to do, I suggest learning by experience. Greenlight is a financial platform built around the idea of creating a responsible and a safe environment for children to learn things like how to uses a debit card, the importance of saving, the advantages and risks of investing, and the impact of donating. Greenlight offers the opportunity for parents and guardians to guide their child’s financial journey with guardrails in place. As Greenlight CEO Tim Sheehan says “”If kids learn to invest well, they can truly change their lives for the better”.
Greenlight, unlike other payment platforms like Venmo, Zelle, and ApplePay is focused on teaching financial literacy. It’s design helps introduce children to banking, debit cards and all. It changes the traditional account checking and savings to a kid-friendly version of spending and saving. The platform allows kids to spend money independently while parents get real-time alerts, encouraging financial conversations. Children track their balance, receive allowance notifications and learn budgeting skills, helping them develop mindful spending habits. Parental control such as alerts are a key reason parents choose Greenlight for teaching financial responsibility.
Aside from teaching healthy spending habits, parents can enable a feature within their children’s savings, where the savings features cannot be touched without parental approval. This helps to instill healthy financial habits and practices from the beginning. Allowing time for a savings account to grow, encourages children to use informed reasoning to justify moving money from savings to spending. Instead of simply moving money from the savings account to the checking account when the checking account is low, Greenlight’s feature of needing parent approval can prompt discussions of why the child wants to withdraw from the savings. The parent can then give opportunities to explore other options. They may suggest that their child not drink Starbucks for a month instead of taking from their savings in order to afford the purchase of a shirt or pair of shoes that the child wants. Ultimately, the importance of learning to save early can set children up to be financially responsible from the start and not be left trying to dig themselves out of debt later in life.
Beyond the basic understanding and healthy habits of a checking and savings account, the investing feature teaches lessons beyond percentages but also awareness of worldwide events and their impacts on finances across many countries. Greenlight’s investing feature allows the child to use their spending money category to invest in various companies as they explore best practices for the stock market and are often inspired to further research topics to increase their odds of successful investments. This research often leads to realizations of outside variables that have a great impact on the market. For example, the impact of the pandemic on Amazon’s growth and the tariffs on companies’ bottom lines may influence the choice to make certain investments as the child sees first hand the ups and downs that influence stocks. This not only teaches about the opportunity and risk of stocks as well as the experience of riding out the market. The investment feature can also spark not only conversations about stocks within the home, but also interest in researching stocks through annual reports, tracking stocks through the NASDAQ, and listening to financial podcasts. Taking the time to research can result in financial successes while also demonstrating the impact of worldwide events and politics on the economy worldwide while the Greenlight card limits the child to the amount in their spending so it is a controlled experiment.
Unlike the standard bank account, the giving section on the Greenlight app is a section where a selected percentage or amount of money is moved from the allowance out of the spending category directly to a donation to a certain charity or foundation of the account owner’s choosing. With an understanding of spending and saving, the giving feature helps children practice giving to causes they believe in, which can help them learn to be humble and see a world beyond their own backyard from a young age. Understanding the importance of charity and giving back can help children learn these habits from a young age and factor in charity when creating a budget of their own. As described by Greenlight, “Giving back is one of the most important habits you can build with your kids, and we’re honored to help you along the way.” This emphasis on giving back demonstrates that the app is trying to guide your child to understand not just spending but also giving back. Helping Greenlight consumers learn that they are fortunate and it is important to assist others in need of financial support through donations. This feature also allows its user to watch the total in the giving section to increase with each donation as it highlights how even a small donation each time can have a large impact over time. Being the next generation, giving is an important feature because it empowers users to financially help with problems like homelessness, poverty, hunger, and environmental issues to name a few. Beginning to make a positive impact on the world with their own money and choices raises this next generation of spenders, savers, and investors to be aware and active in combatting the struggles around them within and outside of their community.
I highly encourage all parents to get the Greenlight app paired with a Greenlight debit card. It can help children to learn how to make the best financial decisions from a young age and also teach them how to give back to the community. Saving up money that cannot be easily accessed but can be seen helps children generate the habit of creating a financial safety net. With parental permission, money can be moved from the savings to another category; however, having to explain your reasoning for moving it causes an awareness that there should be money that is not touched unless there is an emergency or good reason. This practice helps children learn to save up small amounts over time without spending that money. Learning about investing and the current economic state of the world are healthy practices obtained through the investing section as it teaches children what to invest in based on researching what is currently happening in our economy. Regardless if you chose the Greenlight program or not, I cannot stress enough the importance of beginning these talks early and often with your child. Eighteen comes quickly and unfortunately young adults often fall prey to credit cards and other financial misfortunes that can be avoided through learning about healthy habits of spending, saving, and investing.
