Financial Education – Teaching the Value of Money

There have been a number of articles this year about financial products targeting children with the aim of teaching them to save, spend and think about money ready for when they are adults.

This has become more urgent as the use of cash has declined. Research has shown that people who ‘visualise’ money as cash treat it differently from those see it as a line in a spreadsheet. Living in a digital world needs more sophistication than living with cash and the complexity involved continues to grow.

The 50 million Americans aged eight and over who don’t have a bank account are defined as ‘pre-banked’. According to Till Financial they have $400 million buying power and are, therefore, a valuable market. As a result, it has launched a product designed for this group.

The goal is to teach children to be financially literate, not just to hold their money with Till. In addition to a bank account, users receive a digital and physical debit card and what are described as ‘goal-based saving tools’, ie. saving for a specified goal. They can also set up recurring payments for subscription services. This creates a clear link between saving and spending and supports the goal of teaching children to be smart spenders, not just savers and investors.

One of the investors is the Chief Operating Officer of PayPay Ventures. She made the comment that she used to give her children cash to buy things, or her card to use, ‘but that way, the money is meaningless to them. They didn’t really know how to understand what things cost and there was no sense of ownership.’

Till Financial raised $5 million to launch this ‘collaborative family financial tool’. It makes its money on interchange fees and plans to earn by partnering with merchants to offer rewards to users and referring users to other financial institutions as they get older. Once users get beyond school years, they leave the platform.

There are, of course, a wide range of products available from banks and fintechs that seek to do the same has Till.