Money Managing Apps for Kids to Teach Financial Responsibility

Listen to the podcast version:

Includes a Spreadsheet with 7 apps and comparison of features.

Money. With so many people struggling with debt and financial insecurity, it’s crucial to equip young people with the knowledge and skills they need to manage their money wisely. Fortunately, there are many great apps available that can help you teach your kids about finance in a fun and engaging way. 

Let’s start with the “why” parents should educate their children in personal money management. Sometimes statistics say it best.

Our adult population:
1. In 2021, Americans reported losing an average of $1,389 because of a lack of personal finance knowledge. (What you don’t know can hurt you.)
2. In 2019, 60% of U.S. adults had credit card debt.
3.  Americans owe over $800 billion in credit card debt as of Q1 2022.
4.  42% of adults worry about meeting their daily expenses as of 2020. 40% were concerned about their financial status, while 37% reported they were just getting by financially.

Our teens:
1. In 2021, 75% of teens report learning about personal finance from their parents. 52% of teens learn from school and 42% from social media.
2. 32% of teens don’t know the difference between a credit card and a debit card.
3. 73% of teens reported wanting more personal finance education in 2021.

Why Should I Use a Money Managing App?

Managing money is a crucial life skill, and it’s never too early to start teaching children about financial responsibility. Here are some of the advantages and lessons learned in using a money tracking app:

1. Helps children understand the value of money: 
When children receive an allowance, they learn to associate work and effort with money. 
Read The Pro’s and Con’s to an Allowance. By using a money tracking app, children can see how much they have earned, how much they have saved, and how much they have spent. This helps them understand the value of money and how to use it wisely.

2. Teaches financial responsibility: 
A money tracking app can teach children about budgeting and saving. With the app, children can set goals for how much they want to save and track their progress. This teaches them the importance of saving and helps them develop good financial habits.

3. Provides transparency: 
Using a money managing app provides transparency for both parents and children. Parents can see how much money their children are earning, saving, and spending, while children can see how much they have left to spend. This helps to prevent arguments and misunderstandings about money.

4. Encourages independence: 
A money managing app encourages children to be more independent with their money. Instead of constantly asking their parents for money, they can see how much they have available and make their own decisions about how to spend it. This can empower your children with a sense of responsibility and self-reliance.

5. Provides a safe and secure way to manage money: 
A money tracking app provides a safe and secure way for children to manage their money. They don’t need to carry cash around, and they can’t lose or misplace their money. This can provide parents with peace of mind and help children feel more confident and secure about managing their finances.

Overall, using an allowance and money managing app for kids is an effective way to teach children about financial responsibility and help them develop good money habits. It provides transparency, encourages independence, and provides a safe and secure way to manage money.

What should I look for in a money tracking app?

When choosing an allowance and money tracking app for kids, it’s important to consider the features that will help children learn about financial responsibility and manage their money effectively. Here are some features that are important to have in an app for kids:

1. Allowance management: 
The app should allow parents to set up and manage allowances for their children. This includes setting the amount of the allowance, the frequency of payments, and any chores or tasks that need to be completed to earn the allowance. Some of the apps specialize in allowances, so this feature is more robust than the others, like investing. However, because this is so fully developed, you have chore charts, split chores, and rewards like stickers, ice cream outings etc.

2. Budgeting tools: 
The app should have tools that help children create and manage budgets. This includes the ability to set savings goals, create spending categories, and track expenses. You will have to look carefully at this feature in each app you are interested in. This is done differently and many say they do this, while what they really do is allow you to “round up” purchases or save 1% on purchases on their credit card.

3. Parental oversight: 
Parents should be able to monitor their children’s spending and savings activity within the app. This can include the ability to set spending limits, approve or deny purchases, and receive alerts when their child makes a purchase. There is a difference between alerts and a shared account where you can check in, know your comfort level.

4. Educational resources: 
The app should provide educational resources that teach children about financial concepts such as saving, budgeting, and investing. This can include articles, videos, and quizzes. Many of the apps have these on their websites, not in the actual app, so you may have to dig a little to find these.

5. Ease of use: 
The app should be easy for children to use, with a user-friendly interface and simple navigation. It should also be visually appealing to engage children and hold their interest.

6. Security: 
The app should have robust security features to protect children’s financial information. This includes encryption of sensitive data, two-factor authentication, and regular updates to address any security vulnerabilities.

7. Accessibility: 
The app should be accessible on multiple devices and platforms, including smartphones, tablets, and computers. This allows children to easily access their budget and financial information from anywhere.

Overall, a budgeting app for kids should be designed with the specific needs of children in mind, providing them with the tools and resources they need to learn about financial responsibility and manage their money effectively. 

I looked at many allowance and money managing apps. It was hard to remember which one did what. So I created a spreadsheet for you. This lists features that are important, extras, price and platform.

Download Spreadsheet [Money Managing Apps For Kids]

The digital apps I looked at and put in the spreadsheet are:

Bankaroo: I really liked this one and then discovered it is ending service in October.

Busy Kid: The most complete allowance and money managing app, I really like this one.

Current: This one offers a lot, I could not easily tell which features were in the base plan and which ones were in the premium plan.

Famzoo: A great overall allowance and money managing app.

Greenlight: This app has the capability to do a lot, but I become disenchanted when they advertise a lot of features and then reveal there is a “base” plan and an extended one. Check out the spreadsheet-even some of the features they have are “kind of” because their definition is not quite how I would define that feature.

GoHenry: A stellar option, however, from what I could tell, it does not have a family plan.

iAllowance: this is a fun app. You do not have to pay monthly, it is a very low one time payment. All it does is allowance. It is not a money managing or learning budgeting and saving app. But, it does allowance really well.

Rooster Money: I was excited about this one when I looked into it in October. Now however, they are no longer taking anyone outside of the UK.

Step: Step appeals to the teens. It is about credit building. It also allows investing with bitcoin and (I assume) teaches how to do that.

I love the idea of teach our children financial responsibility with an allowance. When they are young, I would have them on iAllowance so the child learns the basics of using an app for their chores and seeing their money go in and out of the bank. As the children age, I would use an app like Busy Kid or Famzoo so the child grows in their financial literacy and learns basic skills like investing, giving, and saving.

“Someday, Abu, things are gonna change. We’ll be rich, live in a palace, and never have any problems at all.” Aladdin