Teaching your kids about money lays the foundation for their lifelong financial success. And the earlier you begin, the better. Before electronic payments came along, giving your kid an allowance entailed a trip to the bank and handing over the cash. But technology has created new ways to transfer money from you, the parent, to your offspring payees, creating many opportunities to go digital with your allowance plan — and quite a few cool learning opportunities in the process. Read on for easy, helpful ways to enhance your allowance plan with UBTgo.
Create teaching moments
Younger kiddos and tweens who really need the physical exchange of cash could benefit from a savings account (like our Simply Savings Student account) and attached ATM card. You can set up an automated transfer that is set for the frequency and date you want them to receive the money and how much you want to send them, or you could do it manually at first so they could watch you “pay” them. The two of you can view the account together online, make decisions regarding the balance, and talk a bit about the wonders of compound interest. (Even a nominal rate will introduce the concept of investing returns!) And together, you can make a trip to the ATM for withdrawals when there are purchases or donations on the horizon. (One important note: A $5 activity fee will be assessed if you or your child make more than six withdrawals, transfers or payments in a month.)
In case you’re not the only money manager — or you’re assisting more than one future financial wizard — you’ll be able to set up transfer and balance alerts. These text alerts can serve as a notification or reminder to you of account activity, allowing the freedom your child needs while still giving you the ability to set parameters. These alerts are next-day, so it’s always good to check UBTgo regularly as well.
Your teens are most likely going to want a checking account in addition to that savings account. While you’d like to comply, you may be hesitant to hand over the financial keys. We hear you, and we’ve got your back. A checking account like our Simply Free Student option connected to your child’s savings account sets your child up for successful saving and spending habits — with a few built-in controls and some guidance from you. Transfers to your teen’s account are easily done online, and your kiddo can be encouraged to become familiar with every feature of UBTgo, from your transfers in at allowance time to keeping tabs on their debit card to checking daily balances and pending transactions.
Speaking of transactions, the two of you can decide their spending limits and if any categories are off-limits altogether. You may decide to set controls within UBTgo to limit spending at the convenience store, the app store, or whatever is tempting, or even block entire merchant categories completely to remove temptation. As the budgeting, spending, and savings process improves, you may both be perfectly comfortable with just the alert method, notifying you of purchases or low balances. Or, the text alert method may be where you start, implementing more controls only if necessary — allowances are for learning about money, after all.
At UBT, we want to help you teach your kids how to use money responsibly and prepare them for a financially healthy adulthood. Click here to check out more of our kids and money resources, and if you don’t yet have the UBTgo app, now is a great time to download it!
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