It’s no secret that children who do chores have higher self-esteem, are more responsible, and are better able to deal with frustration and delay gratification, all of which contribute to greater success in school. But did you know that you can also use chores as an effective money teaching tool?
A BusyKid allowance app is changing the way families look at chores and teaches kids about money management at the same time.
Rather than just giving your kids money for completing chores and hoping they don’t blow it all on candy at CVS in one day, BusyKid gives you the ability to teach your kids basic financial literacy skills – how to earn, save, invest, donate, and spend their hard-earned dollars.
Our family has been using the BusyKid app for about a year. Here is why I think it’s a great tool to teach your kids about money.
Source: BusyKid website
It’s so much more than chores and allowance
Kids earning an allowance by completing chores is at the heart of BusyKid. No more color-coded allowance sticker charts hanging on the fridge. We are becoming a cashless society and the BusyKid app reflects that reality. However, the app is so much more than chores. It provides multiple features that will help kids gain valuable hands-on experience in managing money.
Chores and allowance by age
The app has 12,000 prepopulated chores by age with suggested prices, which is great if you are struggling to come up with a list of chores and have no clue how much you should be paying.
You can set up your own chores and adjust the prices.
For example, my kids are expected to empty a dishwasher, make their beds, take out the recycling, and water plants, among other chores.
Once the kids complete the chores, they log into the app, tap the “I did it!” button, and the weekly allowance is directly deposited into their account each Friday. You could change the payday if you wish.
After the money is transferred from your bank account into your child’s BusyKid account, it’s allocated into three buckets: spend, save, and share. The save bucket also includes an “invest” sub-bucket. You can adjust the allowance allocation as you wish.
For example, our family uses the following allocation: 25% goes to spend, 70% goes to save, and 5% goes to share. I let my kids decide how they want to split the save bucket between saving for an expensive item and investing.
The percentage of the weekly allowance is saved automatically. If your child wants to invest some of his “save” money, the app lets him easily do that.
BusyKid is the only chore app that gives your kids the opportunity to use their allowance to invest in stocks or index funds. BusyKid has partnered with Stockpile, which allows fractional purchases of individual stocks or index funds through custodial investment accounts.
For example, Nathan owns shares of Amazon, Apple, Berkshire Hathaway, and Google. Milan is a proud shareholder of Pepsi, McDonald’s, and Disney.
We look at the performance of their stocks at the beginning of every month. Based on that, they decide if they want to add to their position or buy another stock.
Kids learn the importance of giving back by donating a percentage of their allowance to charity.
They can pick between 32 charities, such as Toys for Tots, A Special Wish, American Red Cross, and many others.
The share of the allowance that lands in the “spend” bucket could be withdrawn in cash or put on the BusyKid Visa Prepaid Spend Card.
The BusyKid Visa® Prepaid Spend Card gives your kids the freedom to spend anywhere Visa® is accepted, and parents see every transaction made.
My kids were ecstatic about having their own bank card! Now if they want to buy something online, they don’t have to give me cash for it. We can just use their card as a payment method. Welcome to reality.
Bonus time? No problem! The BusyKid Bonus gives a parent or grandparent the chance to pay a bonus to any child to show appreciation for a job well done.
While the app is designed to let kids make financial decisions on their own, parental approval is required when it comes to any money moving outside the system for cash, donations, investing, or shopping on a Spend Card.
BusyKid provides a detailed history of all chores, paydays, and all the transactions, including investing and activity on the Spend Card.
Pay allowance with no chores
If your family does not believe in paying for chores, the BusyKid app gives you the ability to pay your child a recurring allowance no matter if the chores are completed or not.
Parental matching on savings
This is a new feature on the app, but I’ve been using this strategy even before it was introduced. I called it a “mommy 401(k) match”.
Basically, I’m matching the dollar amount my kids are choosing to put in their “save” bucket. That way I’m rewarding them for delaying spending and working towards their bigger money goals.
Financial illiteracy – an American Epidemic
Why should you be teaching your kids financial literacy? Because nobody else will.
BusyKid has partnered with the American Public Education Foundation (APEF) to shine a light on what is really being taught in schools and advocate for their improvement and development.
Based on requirements, standards, and curriculum, each state was graded on its K-12 financial education. 35 out of 50 states earned a C, D, or F grade! You can do a happy dance if you live in Utah, Virginia, or Missouri – the only states that scored an A.
Curious to see how your state ranks? Click here.
For example, I live in New York. New York gets a D in teaching children financial literacy at school! NY requires only 0.5 credit of high school economic course, which has financial literacy standards. There are no K-8 financial literacy standards.
That’s not good enough. Therefore, if I don’t teach my children financial literacy, they would be headed into young adult life without understanding how to save or invest. They would possibly rack up tons of student and credit card debt and will start their life in the financial hole.
If you’re planning on having kids or you already have kids in your family, how do you plan to teach your kids about money?
The bigger picture
One of the mistakes young parents can make is not teaching their kids how to manage money from an early age. It’s very concerning because we are witnessing a widespread lack of personal financial literacy among young adults today. Record levels of student and credit card debt are a direct result of that.
With the BusyKid app, you will be able to stay on top of your children’s financial education and create healthy financial habits that will last them a lifetime.
Curious what’s next?
I think that BusyKid App works best along with an investment app Stockpile.