Money is something we all need to pay the bills, but it's something many of us don't like talking about. Financial experts say that needs to change. And, they say the talk needs to start young.
From cups of coffee to cell phones and even that random can of pop. Those can all add up to be budget busters. But, Drake Freshman Mitchell McCoy says he has the key to money management is in his back pocket. He says, "It's really nice to have my card."
He has a Spend Smart card. It swipes like credit, but spends like cash. He says, "I've got a limit that I can spend like in real life, like a paycheck. I can't spend more than my paycheck."
Spend Smart is a prepaid debit card. His parents load his allowance on it. They all get a text message every time the teen buys something. Mitchell says, "My alerts on my phone that can say, hey, you just spent this much here. This is how much you have left on your card. Be careful."
Mitchell’s Dad Mike McCoy says, “We've just created a coaching opportunity, or teaching moment, if the parent doesn't like the way the card is being used."
Mr. McCoy is also the Chairman and CEO of California based Bill My Parents, which offers the Spend Smart card. He says for about $4 a month, parents can see what their teens are buying, help them set a budget and talk about how they can improve spending habits. He says, "One of my boys used the card five times at Subway. And, one of the things we helped him understand was you're one fourth of the way through the month, but you've used 50% of your money, so you're going to have a budget problem."
Financial Expert Dennis Markway says it’s a good way to get teens thinking and talking about money. But, he says parents need to teach money management long before their kids get to a college campus.
He says, "I have two young children. I have a seven year-old and three year-old. And, we play financial and money related games with them. We talk about money."
Markway teaches personal finance at Drake University and is President of Iron Horse Wealth Management. He says it's never too soon for parents to take their kids to the bank or credit union to open an account. Start an allowance before the teen years. Then, set a budget, and even financial goals. He says, "What's important to them, and are they spending money in a way that's consistent with goals and values, or is money just going down the drain?"
Mitchell McCoy says that makes sense, as he prepares for a smartly spent future.
The Spend Smart card is for anyone 13 and older, but parents sign up their kids.