Fintech for Kids

When I was a kid I had a passbook from Citibank. It looked like this:

When I wanted money I had to get to the bank before 3PM and stand in line for the teller and ask her to withdraw the amount I wanted and specify the breakdown of currency that needed (quarters for video games, dollars for rolling around).

To make a deposit I had to fill out a slip that looked like this:

- note the minimum deposit was $50.00

The experience of owning that passbook taught me about money. When I was young $50 was a ton of cash and I got to see the account grow and shrink as I used it. I received hard currency when I withdrew and understood the value it held.

There was, of course, no online access to my bank account and no phone access but that didn’t matter because I always had my passbook which served as both account statement and current balance.

My kids aren’t so lucky. If you’re under 18 you’re not allowed to have online (web or mobile) access to your bank account where I live — something I find completely ridiculous in this day and age. It disconnects kids from money and deprives them of learning about interest, credit and budgeting. It’s no wonder that college students have such a hard time with credit cards. If your first experience with credit happens when you are out of the house and no one can help you understand it of course there’s a higher chance that you’ll struggle.

Since parents control the accounts children are forced to ask parents (constantly) to check balances and make deposits (Christmas, birthday, and grandparent cash). It feels wrong that kids have to wait until age 18 to start to learn how to manage money and keep track of payments and balances.

Your first experience having a declined charge should be trying to buy cookies at the market with your friends not on a date or at your first business dinner. The same way that going broke spending all your money on sneakers should be a lesson learned at 17 not 27. And hopefully once experienced it is not soon repeated.

Many startups are making strides towards making the banking experience better but in order to educate the next generation in financial literacy we need to allow them access to the tools and information to learn.

If switching costs for banking are coming down wouldn’t it be smart for the banks to capture customers as early as possible and build a long-term relationship? Where’s the banking app that helps kids understand money rather than think of it as a thing that comes out of the wall when needed?