How To Help Your Kids Manage Money In The Digital World

Teaching kids about money in the digital world goes far beyond just managing pennies in a piggy bank.

Halifax and Internet Matters found that the number of account holders aged 11-18 who use online banking has increased by 40% in just two years. This means there’s a need for parents to ensure their kids know how to manage their money online.

“Kids need be having conversations about money,” said Russell Winnard from advice service Young Money. “It’s important to talk about where money comes from and discuss the differences between needs and wants.”

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So in a world of online banking, prepaid cards and contactless - how can parents teach their children the value of money - and the importance of taking control of it?

1. Introduce them to digital money early.

If you use online banking or debit cards then your child will be exposed to ‘virtual money’ almost from birth. “If virtual money is already part of your family life, don’t forget to show your growing child this bit as well,” the Money Advice Service states.

They advise showing your kids the balance on your current account online or on an app. Then use your card to shop for food, before showing your child the balance again so they can see how it’s less than before. Do the activity again before and after withdrawing cash, or shopping online. To give them a clear idea of the impact of spending on your finances, even when coins and notes don’t change hands.

2. Teach your kids how to learn more about their money online.

Helen Saxon, chief product analyst at Money Saving Expert, advises getting your kids to investigate what they can find out about their bank account online, starting with interest rates: “Get your kids to monitor the rate of the account, so they’re involved. Put your child in charge of checking the interest every month to see if it’s still paying a decent rate – maybe bookmark the bank’s interest rate page on your web browser so it’s easy to find.”

3. Make sure they know the online safety risks.

Fraud and scams in the online banking world are more sophisticated than ever so it’s vital to start teaching them basic safety from a young age, according to Saxon.

“You’ll need to help them pick a password, and help them learn they shouldn’t share this with anyone (read the HuffPost UK guide on how to create a strong password, here),” she said. “Get them to use your email address (or a family one that you can access) so you can discuss any emails from the bank (and filter out any spam ones). And tell them to tell you immediately if anyone asks them for money from their account.”

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If your kids are slightly older, it’s important they’re equipped to know further safety measures. Winnard said parents should remind kids to check the URL of websites for HTTPS (the ‘S’ is for secure) when making payments online; and to always question emails or texts that you’re not expecting.

To see if they’re likely to be duped by a fraudulent text or email, get them to take the Take Five test, advised Winnard. It puts kids in situations to do with online banking and asks them whether they should trust an email or text. It then explains why/why not the messages may be fraudulent.

4. Use a prepaid card.

Rather than paying kids pocket money in cash, parents can get prepaid cards for kids to introduce the idea of having a debit card while also retaining some control. Mums and dads can set automatic pocket money transfers, tasks and spending rules for their child while also teaching them to save and spend responsibly. “These cards also don’t allow spending in places like off licences or betting shops, so can provide a bit of extra protection,” said Saxon.

However it’s worth bearing in mind that these cards cost money, for instance Nimbl is £15 per year, Osper is £2.50 per month and GoHenry costs from £2.99 a month.

GoHenry’s founder Louise Hill, from Hampshire, came up with the idea with a group of friends after being disappointed that there weren’t the right tools to teach her kids - now aged 16 and 19 - about money. “The high street banks simply didn’t offer what we knew we needed,” she told HuffPost UK. ”Our children borrowed our cards to spend online, pocket money using cash was often a source of family debate - who’d had what, for what, and when.”

GoHenry

5. Ensure they still know about saving.

If your kids are accessing money online through apps, it gives them a clear view of how much money they have in their account and, if they have a savings account, how much money they have in there.

“The most important thing when saving is having a challenge or goal and a reward when that goal is reached,” Winnard said. “Experiencing delayed gratification is important for lifelong habit forming, whether that’s saving up for a computer game as a child, or a new car as an adult.

“Habit forming is less about how much, savings could be as little as 10p every week, but the regularity and experience will help build important attitudes and skills.”

Before You Go

Tech hacks to save time and money

Tile Mate(01 of05)

A no-brainer this one. The Tile Mate is a Bluetooth tracker that you can attach to anything you might need to locate. Use it as a key ring and those hours spent frantically turning over the contents of your home in search of your house or car keys are over. Via an app on your phone, you simply press a button and the Tile Mate rings.

Similarly, if you have access to the Tile Mate but lose your phone, you press a button on the Tile Mate and it causes your phone to ring – this works up to a range of 100ft.

But what if you attach a Tile Mate to something like a bike or rucksack and this gets lost or stolen and could be miles away? In this instance, the app lets you know the last location the Tile Mate was registered, while also utilising the Tile Mate community at large. If you register the item as lost, when someone else with a Tile Mate comes within Bluetooth range, you will receive an alert notifying you of the location. (credit:Tile Mate)

A portable battery(02 of05)

It’s not the sexiest gadget in the world but it’s the kind of item that could save the day if you find your phone is out of charge precisely when you need it most. There’s a wide range to choose from out there, but you can’t go wrong with something like the Anker PowerCore 1000, which can provide multiple charges to phone or tablet before needing recharging itself.

Alternatively, if you’re unlikely to be near an electricity source anytime soon, a solar-powered portable battery like the iBeek is capable of charging a smartphone three or four times over. (credit:Anker)

Vacuum robot(03 of05)

We haven’t quite arrived at the promised land of the robot butler yet, but a machine that does the vacuuming while you put your feet up is certainly moving in the right direction.

There are a wide variety of models on the market, and some of them are far from cheap, but iRobot’s Roomba range are among the best. Not only does the Roomba adjust its suction power according to the terrain (rug, carpet, hard floor, etc.), you can programme it remotely via your phone, setting it to work while you are out. Using a combination of sensors, it slaloms around furniture and household clutter, picking up fluff and dust, before rehousing itself in its docking station to recharge. (credit:iRobot)

Smappee energy monitor(04 of05)

Fit the Smappee energy monitor to your fuse box and it communicates with an app on your phone or other device to give you real-time information on electricity usage and cost, as well as providing information that enables you to better understand your consumption habits.

Combined with their plugs, you also have the ability to turn appliances on and off remotely via the app. Smappee also make gas and water monitors that work in the same way, with the additional bonus of alerting you to any leaks in the system. Ultimately, you could be looking at reducing your energy costs by 30 percent. (credit:Smappee)

Universal remote(05 of05)

So you’ve got the TV, the TIVO box, the DVD player, the surround system and maybe a streaming device like Apple TV or Google Chromecast. And they’ve all got their own remote controls. Cue spending the next half hour with steam coming out of your ears trying to locate them all, and then a further ten minutes juggling these remotes simply to power up everything in order to watch/surf/play what you want.

If you added up all the time spent doing this, you’d realise a universal remote was the way forward. Logitech offers the broadest range. At the top end is the Logitech Harmony Elite (£215 approx), which synchronises easily with all your devices, comes with colour touchscreen, voice control and a vast range of settings. But if you want a remote without all the bells and whistles, the Harmony 350 (£40 approx) will do the job perfectly well, and is able to synch up with 225,000 different devices over 5,000 brands. (credit:Logitech)