When I gave birth to my first child, our financial advisor gave us a gift I will never forget. It was a piggy bank (of course) with three sections; one for saving, one for spending and one for donating. I loved the idea that kids could get a financial education from an early age and learn the importance of budgeting, saving and giving.
As a toddler, he loved his “money banks” but despite my efforts he did not quite understand the difference between its three sections.
Children and Money
My kids are now at an age where they have enough saved to make their own purchases and I worry that they will waste it on frivolous nonsense. On the other hand, I know they have to learn through experience and what may seem frivolous to me may seem really important to them.
Apparently I am not the only one trying to figure out how to teach my children to be financially responsible. Research shows that giving a financial education to kids is a major concern for a whopping 97% of parents, but many like me are not sure where to begin.
Last week I heard about Virtual Piggy (www.virtualpiggy.com), a safe way to teach children to save, spend and give online. It sounds like this might be the answer I’ve been looking for. Here’s how it works. First, you go in and set up an account for yourself and your accounts for your children. When setting up your child’s account, you can include controls such as approved merchants and transaction limits. You can also set up a required approval before a purchase is made or before some purchases, depending on your level of comfort with your child making his or her own purchases.
Also, you can set monthly allowance amounts, savings targets and charity goals for your child so they get the hang of that financial education by learning through experience. By putting your child into a real world environment where they can make their own purchases, they are receiving first-hand experience with managing a budget and being financially responsible while maintaining the ability to maintain control if necessary.
You may be wondering how all this works behind the scenes. When a parent registers and account they provide credit card information and a shipping address. All information is kept secure under the highest level available, and your child will never have access to it or use it directly. Your credit card will only be charged when your child makes an approved purchase using his or her own name and password. No other personal information for your child is needed. Virtual Piggy is a certified licensee of the TRUSTe® Children’s Privacy Program, which has been approved by the Federal Trade Commission as an authorized safe harbor under the Children’s Online Privacy Protection Rule.
From November 12th through January 15th, Virtual Piggy is offering hundreds of dollars in discount holiday promo codes to families when they sign up. To see the offers, go to: www.virtualpiggy.com/mvp.
The Virtual Piggy service includes a wish list, where kids can add the products they want to either save up for, or receive as gifts. Parent can always view their wish list. Right now Virtual Piggy is doing a wish list sweepstakes where they will randomly select ten children to win the contents of their wish list (up to a value of $500). For more information, go to: www.virtualpiggy.com/wishlist.
Having seen too many friends go into credit card debt in college that ended up hurting them for years afterwards, it is important to me to teach my kids to be financially responsible from the get-go. The lure of being able to purchase on credit is too tempting without having received a financial education from the get go. If the three tiered “money banks” did not do the trick I am hopeful that this service will continue to be just what we need.
By the way, if you are on Twitter and want to learn more, there will be a Twitter party with Virtual Piggy this Thursday night. Here are the details:
Disclosure: I received compensation to try Virtual Piggy for writing this post. It is from Splash Creative Media on behalf of Virtual Piggy. All opinions, the kids and the three tiered money banks are absolutely my own.