Teaching kids to make wise decisions with money is a top priority for working parents, but it doesn't always come easy.
Nearly three-quarters of adults have some kind of financial regret, whether it's not saving enough for emergencies or racking up too much credit card debt, according to Bankrate.com.
Many parents are trying to help their children avoid these kinds of mistakes, and 73% have had financial literacy conversations with their kids, often beginning in elementary school, a survey from FinanceBuzz.com found.
To help parents and their kids establish healthier money habits early on, Rego, a digital wallet platform, offers tools and guidelines around credit card usage and other financial literacy topics. Their app links to a family's bank account and allows parents to choose how much their child can spend and where they're allowed to use the card, among other features.
"Kids tend to get a lot of their information from sources that you cannot control as a parent, and it makes it very hard to give them the right education and the right guardrails to make sure they're doing the right thing," says Robert Mancini, chief revenue officer at Rego. "The [Rego] app has to be opened and managed through a parent, and when they have the control, they can start instilling those values."
According to a survey from Wells Fargo, 35% of teens learn about finances from social media. While some information was positive, such as information about investing, exposure to these types of platforms with no control over kids' spending can have adverse effects as well: A Harvard study found that social media companies made a combined $11 billion dollars in revenue from ads geared toward children and teens in 2022.
Rego helps parents simplify and control the messaging around how family money should be used, Mancini says. The app breaks down what percentage of available funds can be spent, as well as what should be saved, invested or donated to a cause of their choice.
"You can say, I want 20% of the money they're making through chores to go into investment and 10% to be donated, so they learn how to give back," says Mancini. "All of this starts with the parents providing that structure. There's also a content page where you can put in links you want them to read, and once they go through that education process you can reward them for that. We provide financial literacy content, but it can be any type of teaching [parents] want."
Financial literacy is a critical area of need across age groups: More than half of adults said issues with money negatively impacted their mental health, according to Bankrate, with lack of emergency savings being the leading issue. In a survey by the International Federation of Accountants, the average financial loss of respondents due to lack of understanding was $1,819 per person in 2022.
Employers are continuously investing in these programs, too, but there is still progress to be made: A 2023 Transamerica Institute report found that although 77% of employees think financial wellness programs are important, fewer than three in 10 employers offer them.
In the long run, early education can help rewrite some of the mistakes parents have made, and set kids and teens up for success they can eventually bring to the workplace themselves, Mancini says.
"There are a lot of parents who have debts they cannot pay, or who aren't able to put enough aside for retirement," Mancini says. "With an app like this, kids are learning good behaviors at a young age, but they're also planning for the future. The lessons they learned are something they will carry over for the rest of their lives, so [they don't] repeat the mistakes their parents made."
Source: EBN
Comments