Bill My Parents: Helping teens learn smart spending

I often regret not learning more about personal finance and frugality when I was younger. While my husband and I lived through lean times in our early marriage, the frugality I practiced was not a passion, it was a survival mechanism. As we earned more (and added to our brood) our expenses grew as well, and we eventually found ourselves in a place that perciptated the start of this blog.

I don’t remember ever being a saver. If I got a dollar I immediately went and spent it on 100 pieces of penny candy (yes, I’m that old). I remember saving up money for college, but it quickly disappeared with all the expenses and extras I ‘needed’ at the time.

photo credit: Ravenelle

When I had expenses as a teen during the school year (I only worked over the summers) I loathed having to ask for $5 here and another $10 there ($10 used to fill my gas tank).

When I was earning money as a teen and college student, it was spending money. I never really concerned myself with saving up, monitoring my spending closely, or planning ahead. This caused all kinds of issues including overdraft fees, debt from school loans, and later credit card debt.

I didn’t have any education about personal finance while I was at home or from school. So once I went to school and then started a family, I suddenly had to learn on my feet. It took me many years to correct my poor spending habits. I still battle my them nearly every day, and am still paying off debt from long ago.

I want my kids to have the opportunity to start their lives without making a financial mess that takes year to clean up. The best way for me to teach them what not to do is by modeling what to do now, talking to them openly, and helping them make mistakes now when they are not as costly.

Recently, BillMyParents contacted me to share a pre-paid card with my 13 year old and I jumped at the opportunity. While he is a smart kid, he has his mother’s genes and often thinks only of what’s next on his list to buy, not the long-term. That may be ‘normal’ for a teenager, but I only have 4-5 more years of financial education at home before he goes off to college or the ‘real world’. I need to make those years count.

What is BillMyParents?

“Bill my parents.” It’s a clever name for an equally clever product. The BillMyParents prepaid card is designed to help teens and students learn how to spend smarter. Teens spend billions of dollars every year so it’s important that they learn to manage their money now before they are on their own. With the job sector being so tough for recent college graduates it’s more important than ever to teach our kids to manage their money while they are at home. That’s where BillMyParents comes in.

How to Set Up a Bill My Parents Card:

The process for setting up a card was simple enough. You simply go to billmyparents.com and walk through the super simple signup. You’ll need your own info including a credit or debit card, and your teen’s email address. It took me about 5 minutes to get it set up. You can choose the design of your teen’s card as well.

Choose your card design

Your kids will have their own login to track their spending, and better yet you can track their spending too. You can even opt to receive text messages when your teen uses their card. The benefit of this feature is that it allows you to monitor them now before they are off in the ‘wild’.

Fees for Bill My Parents Card:

There are fees associated with the card, as there are with most pre-paid cards and bank accounts. The fee list below includes all the fees associated with the card. I checked other pre-paid cards and most offer similar or higher fees, so I feel the fees are in line with the industry. While I don’t relish the idea of paying fees I also know that I would rather pay $3.95/month than have to help my teen pay off hefty overdraft fees.

The card does not charge for signature or pin based transactions by the cardholder and costs less to load from your bank account than your credit card. If you have a cashback credit card it may make sense to load from that card since the cashback would likely cover the load fee and the monthly fee for your teen’s card.

Fee Schedule for BillMyParents card

Our Bill My Parents card

My son, Nathan, received his BillMyParents card at the end of last week. It has an allowance on the card to spend on what he needs and wants. I’ve found already that he’s more cautious with his card than he is with cash or my money. While he’s discussed several things he wants to buy, he has yet to buy anything.

Getting the card opened up a great conversation about the differences between cash, credit, pre-paid cards, and debit cards. We talked about how each type of money changes our spending habits, and which kind of money make the most sense to use in various situations.

We also had a discussion about fees from banks, credit card interest rates, and the increasing fees at many banks. As a pre-paid card the Bill My Parents card does have fees for various transactions, and I showed him the legalese that comes along with the card, and the specific fees.

Even though he has yet to spend a dime, I still see huge benefits that came with our card. The main one being the number of discussions the card has opened up in our house about money, credit cards, banks, and spending habits. While it’s true these are topics that we may have discussed at other times, it definitely has brought a whole new level of understanding along with it’s shiny and sleek design.

I’ll be sharing more about how we are using the Bill My Parents card, and a discussion I have with my teen about spending habits and the card soon.

For more info or to signup for a Bill My Parents card visit www.billmyparents.com

Do you have any advice for teaching teens about smart money management?

Kelly

Disclosure: This post is part of a series being sponsored by BillMyParents on theCentsibleLife.com.

About Kelly

Kelly Whalen is the founder of The Centsible Life, a blog where motherhood and money meet. Her goal is to help readers live well on less. Kelly is a mom to 4, and loves that she can stay at home with her kids, and still pursue her passions for writing, personal finance, and social media. You can often find her on twitter and Facebook talking money and motherhood.

Tagged as: BillMyParents, kids, money, sponsored, teens, teens and money

Pingback: Tracking your Teen’s Spending: Bill My Parents — Centsible Life
http://www.thecentsiblelife.com/ Kelly Whalen

There is a card replacement fee, so my thinking was I would share that info with my son, and he would know how expensive it is to replace. So far that has made him very aware of where he keeps his card.
Kellyology

I like this idea of doing it with an early teen. It could help prevent the financial disasters that sometimes happens when kids go off to college and start getting all of those credit card offers.

http://www.thecentsiblelife.com/ Kelly Whalen

So true. I was fortunate I never qualified for credit in college.

Kathryn

Everyone is different, but it is not something I would personally would use with my son and it seems like the fees are pretty steep and although a car might be a bit intimidating to child at first, it is easier to lose track of what has been spent than cash.

I think the best way for kids to learn is to not give then allowance, but make them earn it instead and cash as it is tactile and easier to grasp the concept of actual money leaving their hands to buy the things they want.

My son has never gotten an allowance – he has had to do different chores since he was young to earn it and conduct his on financial transactions (with my supervision when he was younger) and it has made him better at bartering and more entrepreneurial in his approach to getting thing that he wants. When he was as young as 12 he and the neighbor earned money to buy Christmas presents by knocking on the neighbors doors and shoveling show. When he started driving at 16 I have occasionally loaned him my credit car for unexpected car expenses but he knows he has to pay me back within a month to avoid paying interest.

http://www.thecentsiblelife.com/ Kelly Whalen

I think it’s wonderful that approach has worked for you and for him.

For me personally I find it easier to track debit or credit spending, and the text message feature has made it easier for me to track what my son is spending immediately (I don’t have to wait to access the account or check receipts, etc.).We have taken the approach that both earning extra and an allowance work for our family, but with each child my parenting approach is different so it may make sense for one or more of our other kids to have money only through earnings.

I’d love to know if he saved for emergencies with his money or if he used it solely for spending. One of the reasons I like using the card is that I can put spending money on the card, and transfer money to savings for long-term savings for the kids.

Erica

What an awesome way to teach kids about money and responsibility!
http://twitter.com/RachelFerrucci RachelFerrucci

This is a very smart way for parents to teach children responsibility and it’s very important to start young. Helps teach them money doesn’t grow on trees!

http://www.thecentsiblelife.com/ Kelly Whalen

It really does! I wish it had been an option when I was a teen!

http://www.bargainbabe.com Yazmin

I recently graduated from college and it wasn’t till then that I enrolled in a personal finance class. Boy was it was an eye opener! My parents taught me about money since I was young (and still continue to do so) but it somehow hit me harder coming from someone else. One thing I learned was that the best way to teach kids about money is using, well, money not plastic. Plastic will desensitize them to the fact that they are running low on money. You obviously know what’s best for your child. My parents opened up saving account to my sister where she deposits a portion of her allowance and any money gift she receives throughout the year. This has worked for us.

http://www.singlemomandateenagedgirl.com Teresa

Yazmin, a nice feature that this card is that after each purchase, the user and the parent will receive a text which tells what the remaining balance is after each purchase immediately. My daughter can walk to the store, use the card, and I will know how much she spent immediately and how much she has left on the card. This is a really great alternative to “plastic”.

http://www.singlemomandateenagedgirl.com Teresa

I should also mention that as a mother of a teen, many many times I have given her cold hard earned cash and she has lost it! Major bummer when your kid comes home and tells you that they lost the book fair money or the PTA money.

http://www.bargainbabe.com Yazmin

I believe it’s all about showing them to be responsible and learn there are consequences for their actions. My sister once lost money and my father gave her the cash again, but he took it from her allowance. My sister was supposed to going out with friends that weekend and her plans fell through when she found out she didn’t have enough money. She hasn’t lost money since then.

http://www.thecentsiblelife.com/ Kelly Whalen

I think you both have made wonderful points here. It’s really about what works best for you and your child (or in Yazmin’s case her sister). I don’t carry cash and find that I spend it faster, so experimenting with giving cash has taught me it doesn’t work for us.

http://www.singlemomandateenagedgirl.com Teresa

My daughter used this card over the summer for a mission trip while I was at BlogHer in San Diego. I enjoyed getting the text messages knowing where she is and how she is spending her money! It was much better than last year, when she would use my extra debit card and I would find surprises. There is a complete difference when it is “her money on her card”. The fees are worth the peace of mind.

http://www.thecentsiblelife.com/ Kelly Whalen

I love that feature! It’s so nice to be able to see what they are spending. I think the monitoring can help start conversations, and it’s a nice in-between for tweens and teens that are still learning about money.

ImpulseSave

Good idea. There are several fees involved, but if you already shelling out money for overcharge fees, it would probably be worth it. I wish my parents did this with me! I would have loved to have that plastic card: talk about feeling like an adult!

http://www.thecentsiblelife.com/ Kelly Whalen

I know my kids love the ‘fake credit cards’ we sometimes get in the mail. LOL

Tina @ Life Without Pink

Wow what a great resource! My kids are young, but this is something I will have to keep in mind as they grow. I think it’s so important to teach our children how to be smart when it comes to spending and saving. Great article!

http://www.thecentsiblelife.com/ Kelly Whalen

Thanks Tina. It is so important! I don’t want my kids to have to make the same mistakes I’ve lived through as an adult. I would much rather they make their mistakes while they still live at home.

Baysands

These fees are rather steep, I am surprised that someone promoting frugality is behind this. I taught the same thing with a parent/child checking account with a debit card for my teen…. and it was completely free. Still is even though he is 21 now.

http://www.thecentsiblelife.com/ Kelly Whalen

While I do cover frugality, my main message is that you should spend on what is important to you. Based on my teen’s needs, and my research (at the banks we do business with) this suits us best for now.

Some of the ‘free’ student accounts I looked at have overdraft fees, and some are connected to the parent’s own account in case of overdraft. Not something I would ever want my teen to have access to!

I want him to learn the basics of spending within his means before we take the next step and open a checking account.I’m glad to hear a checking account worked for you and your son.