Greenlight Can Help Your Kids Build Good Financial Habits

Did you ever wonder why personal finance was not taught in your K-12 years of school? I certainly did!

Not once in my early education was I offered the opportunity to learn about personal finances. It was up to my parents to teach me.

Parents are the ones ultimately responsible for providing every aspect of a financial education–from giving children an allowance to helping them start their own business.

Unfortunately, not all parents are equipped to help their kids learn about creating strong financial habits.

If you didn’t have parents who explicitly taught you how to manage money, you might feel overwhelmed at the idea of teaching your kids.

This is where Greenlight can help. This exciting new tool can help you teach your children financial literacy.

What Is Greenlight?

Greenlight was built by parents for parents. Tim Sheehan, CEO, and co-founder of Greenlight was constantly frustrated because he wanted to give his kids a consistent allowance to help them learn how to handle the responsibility of money, but he never had the cash to give his kids.

Tim suspected many other parents may have the same problem. He wanted to find a way to teach his children about financial responsibility while making it simple to give them money.

The solution? Greenlight.

Greenlight is a parent-controlled, real-life, version of a bank account for your children. When you sign up for the program, your child receives a PIN-enabled debit card, which can be used to make purchases but cannot be used at ATMs or for cash back.

The big benefit of this card is that the parent can decide which stores or type of stores, and the amount of money in the account, get the “greenlight”–that is, you as the parent decide how much and where your child may spend their money.

Related: FamZoo Review: Preparing Your Kids For Real World Finances

How Greenlight Works

From your Greenlight Parent’s Dashboard, you will add money to your account. Once you have completed this, you will be able to send your children money, which they may apply to their Greenlight debit card or save.

Once you have sent funds to your child’s account, Greenlight will prompt you to add an interest rate. This interest rate will be automatically deducted from your Greenlight Wallet every month. This will help your child learn the awesome power of compound interest.

Since you will be paying all of the interest, you want to make sure it is an amount you and your family feel comfortable with.

You can move money from your Dashboard into your child’s account anytime you would like. Your children can also move funds. However, such a child-initiated transfer must be approved by you in order for the transaction to be completed. They will not be allowed to do anything without your approval.

Greenlight's Benefits for Your Kids (and You)!

Visual Learning Tool 

Traditional bank accounts have such a small amount of interest that kids have trouble seeing how the money grows over time. With Greenlight they can see the growth in a more timely manner. This could encourage them to want to save more money and be more responsible with the funds given to them. Some children are visual learners and this is a great way to capitalize on that.

Instant Notifications

You will receive instant notifications letting you know what your children are trying to spend their money on. Greenlight will also let you know if any purchase was declined and if you need to add additional funds to the account.

Transactions are flexible and happen quickly. Let’s say your child is at a store and they are requesting to buy an item. You then receive a notification and can instantly send them money to cover the cost–or you can deny the request if the purchase is something you do not approve.

Easy Transfers

You can contribute to your account via direct deposit of your wages, a debit card, ACH, or even Apple Pay. However, there are a few limitations on the amount you can deposit.

  • For ACH, you must deposit at least $20.00 for the initial transaction and $1.00 after that.
  • For a direct deposit, the minimum contribution is $1.00. And for your debit card, every time you transfer funds there is a minimum requirement of $20.00 per transfer of funds.

Usage Limitations for Your Children

You can limit and determine stores and merchants you do not want your children using. Maybe you don’t want them shopping on Amazon, you can decline all purchases from Amazon. You can also add money to the “Spend Anywhere” section in the app. This allows your kids to spend that dollar amount at any location they choose.

Customizable Alerts

Greenlight will send you a notification when your child spends money or would like to spend money. You can also get notifications when balances are low or charges are declined. You can choose how you want to set up your account.

Ability to Add Multiple Children

You can add up to five children per account. This app could also be used by grandparents. After all, grandparents always want to spoil their grandchildren.

Related: Kids Can Make Extra Money: 5 Businesses Your Money Wise-Kids Can Start Today

Security and Costs for Greenlight

Many of Greenlight’s features are similar to a credit card. Which means that sometimes merchants will hold extra funds to make sure you can cover the transaction. For example, if you are staying at a hotel they will charge your card a deposit in case of incidentals. This extra hold on the account could cause the card to be declined.

Unlike a credit card, however, Greenlight offers a Personal Identification Number (PIN) for its card. This feature allows you protection for you and your kids against identify theft.

In case your card is lost or stolen you can put a freeze on the account until the situation is resolved. You can do this straight from the app on your phone.

In addition, upon verification of your identity, your card account is FDIC-insured. The FDIC insures deposits up to $250,000.

Greenlight costs $4.99 per month for membership. There are no fees for transferring money to the app or within the app.

What You Need to Know Before Signing Up for Greenlight

You are completely responsible for your child’s card use. If you do not closely monitor the account, the card may not serve its purpose. Remember this is a tool to help your children with financial literacy and build strong financial habits. Don’t let it get out of hand or allow them to purchase anything they want. Use this tool for guidance.

Card Replacement Cost

Since this is not a traditional credit card, there are fees for lost or stolen cards. You will receive your first replacement free. Every replacement after that will be an additional $3.50.

Age Restrictions

This service is aimed at children ages 8-18. There is no age restriction on card usage, but a child must be 13 in order to download the app on their phone.

Credit Card Restrictions

Transferring money to your Greenlight account from a credit card will be seen as a cash advance by your credit card company This will likely incur high fees and interest on your credit card account. If you are used to using your credit card for everything this may not be the tool for you.

The Bottom Line

Financial literacy is important. You are responsible for teaching your children strong financial habits and guiding them toward a successful financial future. It may take a little time and effort but it will truly pay off.

If you are looking for a tool to help you educate your children financial literacy, Greenlight can be a great way to give your children the responsibility of an allowance while still giving you the oversight necessary to keep them on the straight-and-narrow.

Take Action: Sign up with Greenlight

Greenlight Can Help Your Kids Build Good Financial Habits

About Emily Guy Birken

Emily Guy Birken is a former English teacher and respected personal finance blogger. She lives in Milwaukee, Wisconsin with her engineer husband and two high-energy little boys. She has written four books: The Five Years Before You Retire, Choose Your Retirement, Making Social Security Work For You, and End Financial Stress Now. Emily's thoughts on parenting and life in general are found at The SAHMnambulist.

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