Personal Finance

Money management is no child’s play

Satya Sontanam | Updated on September 30, 2018 Published on September 30, 2018

Give kids the freedom to spend, but monitor whether the money is being spent wisely

Most of us understand the importance of money management only after a couple of mishaps with organising our own incomes and expenses. The sooner the realisation, the better it is for our finances.

So, it is very important to create financial awareness in your children from a very young age. Instead of giving them money whenever they want, you must part with a specific amount periodically and ask them to manage their expenses within what is available.

The mode of giving money to your children is important, given that you also would want to monitor whether the money is being spent judiciously.

Add-on credit cards and money-management apps are some of the options available for these purposes.

Kids’ savings accounts

Most banks allow opening of accounts in the name of minors above the age of 10. They issue debit cards, too, which kids can use to withdraw cash or make transactions online, subject to a certain limit.

For example, KIDS Debit card from IDBI Bank allows the minor to withdraw up to ₹2,000 as well as make purchases worth ₹2,000 in a day. On opening a Smart Star savings account in ICICI Bank, in addition to a debit card with a spend and withdrawal limit of ₹5,000, a cheque book will also be issued in the name of the child.

Add-on cards

If you or your spouse has a credit card, an add-on or supplementary credit card can be obtained using that and can be given to your child.

An add-on card usually shares the credit limit of the primary card-holder. It is also possible to fix a lower limit if the parent wants to. Many banks such as SBI and Citi Bank provide these add-on cards free of cost.

At the end of the day, the parent is the one who has to pay the bills, which will help them track the withdrawals and spends made by the child.

Each time the add-on credit card is used, the parent gets an alert in the form of an SMS.

Go digital

There are many money-management mobile apps that help categorise expenses, track spends, set budgets and give warnings. While a few apps require you to manually input transactions, others are automated. Apps such as Walnut are automated — they track expenses (cashless) from the text messages received from banks. These apps also help split bills with friends and transfer money. Parents can encourage their children to use such apps as they help identify large spend categories and manage funds.

One app that focusses more on teenagers and their money management is Slonkit. This app also comes with a prepaid VISA card that can be loaded by the parent with a specified amount. The parent could download the app and give the card to the child. As the card is linked to the mobile app, details of all card transactions are automatically tracked and categorised under food, travel, movies, etc, in the app. The card also provides some limited instant credit on request during emergencies.

Through these apps, you could analyse your child’s spending pattern across categories, set alerts and fix daily spend limits.

Over time, such organised spending habits can create a sense of financial discipline in your child.

Published on September 30, 2018

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.