How Important Is It For Young Minds To Understand Finance?
It is high time we start encouraging young individuals to learn financial literacy and implement those learnings in their daily lives. Some of the influential banking organizations and the mediocre ones are promoting the idea of prepaid debit cards to inculcate the habit of wise spending and banking for teens. So that, by the time they become adults empowered with their independent source of income, they are competent enough to handle their funds wisely.
With the prepaid feature, children can use these cards like standard debit cards. It means parents can get the card funded according to their planned budget in line with the terms and conditions prescribed by the bank, and kids can use this for shopping online or offline for products and services according to their desire. With parental control and built-in mobile apps, introducing prepaid cards for allocating pocket money can be an excellent move for parents who favor the idea of a bank for teens.
Following are some of the advantages of issuing prepaid debit cards to teens:
- Ease of control:
Not only are parents in charge of the amount to be administered, but they also have total control over the spending because the spending limit can be set on a weekly or monthly basis. If they find an excessive amount is being debited, they can freeze the card whenever they want. There is a notification alert for every transaction taking place through the card.
- Enhance financial education:
Building money confidence among young individuals is another beneficial factor because the world is becoming cashless. The next generation needs to be educated about the potential risk of digital money and electronic funds transfers. Introducing the concept of budgeting becomes easy as they can determine the difference between their wants and needs, so it helps them to spend wisely.
- Guaranteed security:
There is always a threat associated with a physical card or cash, but with prepaid debit card for teenagers, total control is in your hands if the card gets stolen or misplaced. It can be frozen in age-restricted areas, like betting shops or off-licensing. There are certain cards with a dynamic CVV system, which means every time a purchase is made, a new CVV is generated within the app.
- No over-drafting:
There is no scope for overspending by the kids, as the card is prepaid only with the allocated budget of their pocket money. These accounts do not provide the facility of over-drafting, so there is no threat of altering future finances. It also ensures that the children can make financial mistakes within safe limits.
- Kids empowerment:
The most significant advantage of introducing early financial independence among kids is to invoke a feeling of authority. With their prepaid cards, they can perform miscellaneous purchases ranging from their desires to buying presents and surprises for their parents and other family members. Not only do they get familiar with the dos and don’ts of online shopping portals and various digital platforms, but they also enjoy accumulating funds in their account when they start saving some funds on their prepaid account.
If parents of young teens are looking for a head start to teach their kids real-life money management tips and tricks, introducing prepaid debit cards is the best way to do that. Features like parental control, real-time spending alerts, and the ability to block are essential guidance tools for parents.