The physical piggy bank is virtually extinct and for good reason. While this childhood relic has long served as a tool to teach kids the concepts of money and good saving habits, it’s no longer relevant in today’s digital age. But how do you teach your child or teenager money management when so little cash actually trades hands these days?
On average, kids ages 4 to 14 years old earn $8.74 in allowance every week or $454 per year—an amount that includes both allowance and cash gifts received for birthdays and holidays.
Regardless of the allowance plan you set for your child, cash savings and conversations about spending, saving and charitable giving aren’t enough. Kids need to put their finances into action in a way that reflects the world they live in.
Fortunately, there’s an app for that! From virtual family banks to “I owe you” platforms that reward young kids, allowance apps are modern and savvy tools to make sure your kids walk into early adulthood with strong financial literacy.
How Do Allowance Apps Work?
With allowance apps, you—the parent—set up a virtual family bank for your child. Essentially, you’re the “bank owner” and your kids are the “customers.”
While no two apps are exactly alike, most allow you to schedule chores and reminders, set payment schedules and track savings goals. Some apps go a step further and are more like allowance management tools. These include banking features with unique parental controls that can be customized according to your family’s financial situation.
There are a lot of allowance apps out there, so picking one can be a challenge. Credit.com knows you’re a busy parent, so to save you some time, our editorial team tested out the top-rated apps and sifted through the reviews to give you this guide to picking the best allowance app for your family.
More Financial Literacy Resources for Kids
It’s never too early or late to start teaching kids about money. Because most kids are digitally connected at a young age—many of these apps are built to be kid-friendly as early as 4-years old—allowance apps are a great way to integrate a strong financial education.
And because apps aren’t the only way to teach kids financial literacy, here are some more resources to help put your kids on the track to success.
The “Fun Links for Kids” include information on banking, the Federal Reserve, U.S. Mint and U.S. Treasury.
An organization that offers tools to help families become financially savvy.
Maryland Public Television offers an extensive list of money websites for kids.
The site offers a collection of activities, games, quizzes, pointers and tools on personal finance for kids, teens, parents and teachers.
A site that offers help for parents and caregivers by providing tips and activities to grow kids’ money skills, habits and attitudes.
This site offers lessons and activities for kids ages 3–18 on how to live financially smart lives.
This page offers a list of books and games geared to help parents and kids learn about and teach financial literacy.
The Council for Economic Education’s Parent Guide is a comprehensive resource that helps parents lead kids K–12 through all of the important aspects of personal finance.
This resource is geared toward consumers and students of all ages. It includes videos, podcasts, articles, calculators and lesson plans intended to teach the essentials of personal finance.
The State of Debt
According to Northwestern Mutual’s 2018 Planning & Progress Study, the average personal debt is estimated at $38,000—25% which consists of credit card debt. And while many financial advisors suggest that people should aim to have all their debt paid off by age 45, we certainly want better for our kids.
Teaching kids financial literacy at an early age lets them make smart decisions as they become young adults. No matter what your child’s age, allowance apps and educational finance games are great ways to put them on the right foot and make sure they’re actually using their screen time productively.