Managing personal finance is a new challenge the current generation has to contend with. People from earlier generations were largely free from this worry.
They had it easy, for the simple reason that their parents never gave them any money. Parents took care of every need, but there was strictly no room – and no money – for extravagance. A lucky few got pocket money and they were treated like royalty by the rest of the crowd.
Times have a-changed – and how. Kids today get a handsome monthly allowance, with a few even flaunting credit cards. And there are a million ways to spend your money now. Malls and mobile phones have made it easier to spend money faster than one can earn it.
With power, comes great responsibility. Parents having granted that power to their youngsters, constantly worry about how they are utilizing the money.
Well, here’s a typical teenager’s spending pattern (Source: Business Insider)
As can be seen from the chart, a number of things can go wrong here, with overspending being the greatest peril. So how do you, as a parent, instill respect for money in teenagers? If modern technology is responsible for raising household expenses, it can also provide solutions to make teenagers responsible and careful spenders of money.
Let us look at some of the money management tools which are basically a by-product of digital disruption.
Digital disruption refers to changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking. (Source: bbr[backed by research])
The first one is a money management app called Bankaroo, available across all major platforms and which boasts of thousands of members all over the world. What started as a young girl’s virtual bank home project in the US, now helps children learn how to manage their savings.
The app teaches children to be smart with their money, tracks of how they spend it, and also helps them to set personal goals to acquire a coveted item (mobile phone, shoes or any other item). But, there is a catch here – the app encourages the children to buy them by saving money.
Closer home, we have Slonkit, whose tagline reads ‘Reinventing the way the youngsters save and spend money,’ It is a physical prepaid card, powered by VISA and DCB bank. The card is free and the mobile app is available on android and iOS. Let us look at the features.
- Parents can transfer funds instantly to the card using any bank’s credit or debit card using the app and they get customised alerts on all transactions.
- The users themselves receive updates as well as useful tips on money management.
- This account is not connected to the bank accounts of the parents.
- Another useful feature is the ‘Go Dutch’ option which comes in handy when it is time to split a bill evenly with one’s friends.
- Blocking a Slonkit card is easy as clicking on a link on their site, in case the card is lost or stolen.
What is of interest from our point of view is, however, the fact that archaic traditional banking system is unable to cater to the new and empowered customers. The digital disruption has spawned a fintech ecosystem which is worth US$ 50 billion and counting.
That also means a bunch of fine young minds with an entrepreneurial bent of mind have one more area to use their skills and make a name for themselves.