Teaching financial literacy to a digital-native generation.
Are children’s piggy banks going the way of the floppy disk, becoming merely archaic symbols of saving? Society is going cashless, with money increasingly virtual making financial literacy more complex and important than ever, especially for kids. 57% of American Gen Zers don’t even know how much money they have in their personal savings accounts according to a recent study from Northwestern Mutual. Start-ups, many backed by large financial institutions are stepping in to teach young adults to be financially savvy.
Greenlight is a US-based debit card and app which aims to teach kids and teens about financial literacy. Parents can monitor kids’ spending through the app, adding money when needed and limiting which venues it can be spent at. In September, they announced they had raised $54 million in Series B funding which will enable them to add further layers of education to the app. Speaking about the purpose of the company, CEO and Co-Founder, Tim Sheehan, said, “In the near future, I hope that this generation of kids grow up to spend wisely, learn the importance of saving and feel confident investing to build wealth over the long-term.”
Still in development, Step is a US-based fintech start-up. Their aim is to speak directly with their teenage audience, empowering them manage their own money. Using limited accounts, Step will even allow teenagers to sign up without needing parental permissions. Unlike other services, their initial account will be fee-free allowing them to work with teens and young adults of all financial levels.
Other fintech companies are expanding their offerings into the teen and youth market. UK based Revolut plans to launch their Revolut Youth cards by the end of 2019 and the corresponding app in 2020. Parents will be able to control their child’s account through their own Revolut account. When the child turns 18 their youth account turns into a full Revolut account. Also in the UK, Monzo launched their own youth account (for those aged 16-17) in 2018 with plans to expand to younger audiences currently in the works.
As financial transactions become increasingly digital and intangible, today’s youth will need to learn the value of a dollar without ever having to touch one. Financial literacy apps can equip Gen Z and those even younger with the tools to handle their digital financial futures.