Since the onset of Covid-19, many establishments have become credit card-only and no longer take cash. With this change, getting a cash allowance for doing chores or mowing the lawn is slowly becoming a thing of the past. However, it is still possible for parents to reward their children and teach financial literacy with debit cards specifically made for children. Greenlight advertises itself as a tool to help empower parents to raise financially-smart children, if you are interested in a tool to help empower you to raise digitally-smart children, check out our GKIS Screen Safety Toolkit.
What is Greenlight?
Greenlight is a debit card and money app for families that is managed by parents or legal guardians.[1] Parents are able to load money onto their child’s card and manage where, when, and how much their child spends.[1] Greenlight was first founded in 2014 and is worth 2.3 billion dollars.[2] CEO Tim Sheehan says that through Greenlight, he is teaching children financial literacy worldwide through the tools provided in his application.[2]
According to CNET, Greenlight is one of the most popular debit card apps for kids and the best choice for kids’ debit cards out of five similar cards.[3] Greenlight accumulated 10,000 users within its first five months of operation and has more than four million accounts today.[4] The Greenlight website mentions that three out of four teens do not feel knowledgeable about their personal finance, and that they were created with the mission of changing that.[5]
Features of Greenlight Debit Cards
One of the reasons Greenlight is the most popular choice among competitors is that there are a number of features that their competitors do not have.
Greenlight has three different plans that parents can choose from, each at a different monthly rate. The least expensive plan provides debit cards for up to five children and offers an educational app, core financial tools, parental controls, a one percent savings reward, fun money skill games, credit for parents, and a “lite” version of investing for parents.[6] The next plan has investing for parents, investing for kids, a two percent saving reward, one percent cash back, greenlight black card, priority customer support, and three-times protection (identity theft, purchase, and phone protection).[6] The final plan has all the aforementioned benefits plus a five percent savings reward, family location sharing, SOS alerts, and crash detection.[6]
Greenlight provides an app for both parents and kids. It is one app but allows for two different experiences.[7] Parents are able to turn cards on or off from the app, get real-time spending notifications, instantly transfer money, and control where their kids spend their money.[7] Kids using the app are able to “Level Up”, a game that teaches kids financial literacy and allows them to learn skills from budgeting to investing.[8] The games provided are full of minigames, videos, and questions that allow for learning to occur.[8]
Benefits
Financial literacy is the ability to comprehend and use various financial skills like budgeting and investing.[9] By creating strong financial literacy skills early in life, children can learn valuable life skills that will benefit them in the future. These skills include knowing how to save for retirement, purchase a home, select insurance, create budgets, invest, buy a car, save for big expenses, use credit cards, and reduce unnecessary expenses.[10]
Financial literacy empowers children and equips them with the knowledge needed to navigate unique financial situations they will undoubtedly encounter in the future. According to a national survey, of 1203 college undergraduate participants, 46.1% of respondents have credit card debt with 27% exceeding $2000.[11] More than 79% of respondents also did not know that a credit score measures your risk to banks and can have a negative impact on future financial endeavors.[11] Through financial literacy, your children can avoid these mistakes and understand how to properly manage their funds which will allow them to avoid getting into debt at a young age.
Risks & How to Mitigate Them
As with any online financial transaction, there are always risks to placing your money in the hands of a virtual bank. However, according to the Greenlight website their debit cards are federally insured for up to $250,000 and come with Mastercard’s Zero Liability Protection.[12]
Allowing your child financial freedom can be worrisome for some parents who are unsure where their child may be spending their savings. Luckily, the parental controls in the app also allow parents to know where their child is spending their money and what they are spending it on. Communicating with your child beforehand about where they can use their money helps to avoid being caught off guard if their card gets declined for a certain purchase. We can help facilitate this healthy conversation with your child through our GKIS Connected Family Screen Agreement.
Does Lil Tay sound like a nine-year-old your child knows? The “youngest flexer of the century” was an internet sensation before her materialistic persona dragged her and her family down. With two million followers, Lil Tay didn’t shy away from using profanity to call other people broke or kick a Rolls-Royce. Accessories in her posts included wads of cash and million-dollar homes.[7] She isn’t the first or only young one showing off money and what it can buy. What is this social media trend?
Flexing on the Gram
Flexing (showing off wealth) on the Gram(Instagram) is a popular social media trend.[3] Upcoming celebrities like “Gucci Gang” rapper Lil Pump flex on the gram to prove they’ve made it to the top.[4] His image is particularly known for flashing Gucci threads head to toe. When critics say he’s inadequate, Lil Pump argues his expensive clothing makes him worthy.
Other social media celebrities flex to build their brand in the same way. Rubber bands of cash and expensive goods bring millions of followers. Riches reflect success and outrageous posts attract engagement.
Internet personality RiceGum is a perfect example. His YouTube diss tracks are notorious for bragging about his money, cars, and a million-dollar home. His lyrics talk about how all those things make him better than other YouTube stars.[3]
Instagram Envy Leads to Compare and Despair
With a continuous stream of real-time, unfiltered, unedited, and freshly published posts, fans have an on-demand, front-row seat to the rich and famous.[1] The compare and despair of watching friends, celebrities, and idols live lavish lifestyles makes them believe they too need cars, houses, and clothes to succeed in life.[3] Ariana Grande promotes the idea in her hit single “7 Rings,” “Whoever said money can’t solve your problems must not have had enough money to solve ’em.” [6]
Social psychologists call this new phenomenon Instagram Envy.[1] Child psychologist, Allen Kanner, states that children believe, “If I could have this product that’s associated with all of this success, then I’m going to be able to join this world. I’ll feel better about myself.”[4]
Provoking envy and anxiety make fans want to spend, leading a generation too willing to go into impulsive buying and higher levels of debt.[8] A 2017 analysis discovered a rise in credit card debt for young adults 18 – 20 years old where the average amount owed was $611.[1]
Studies have found that materialism (holding material things as too important) among children may cause them to become overly focused on what they can gain from friends and family and contribute to more self-centeredness and aggression.[8]
In extreme cases, children blame their parents for not providing the wealth they desire. When their parents can’t help them, children buy high fashion knockoffs. For example, replicas of Kanye West’s designer sneakers called “Yeezys” are highly sought after.[5]
Profits made from these fake designer goods fund illegal organizations. These organizations take part in “terrorism and the trafficking of drugs, people, sex, and wildlife.”[5]
It’s difficult to explain to children that not everything that glitters is gold. Studies have shown that being rich and famous are top priorities for today’s generation.[1]
Social media has given a false idea that such a lifestyle is easily achieved overnight. However, most of the money shown off on social media doesn’t really belong to the person who’s posting about it.[7] Children forget that social media is a staged reality.[8] For instance, the cars and mansions Lil Tay posed in actually belonged to the homes that her mother represented as a realtor.[7]
Why do people show off on social media?
Some show off on social media to make a statement to the world.[3] They feeling driven to prove they’ve made it to the top.[3] But instead of feeling happy once they buy the thing they’ve longed for, research demonstrates that they end ups feeling anxious and dissatisfied.[9]
Others show off “to arouse jealousy, envy, or other negative emotions” in others.[2] They create Instagram Envy to prove that they can’t be overshadowed.[2]
Some people believe that showing off their money will bring them more friends.[3] Teens are particularly vulnerable to the need for attention and validation.
Ideas About How to Start a Fun Conversation with Your Kids
Here at GetKidsInternetSafe, we want your children to dream big and accomplish their aspirations. Social media takes down walls to show that all-star athletes and pop artists were once normal kids too. They did their homework and helped their mother with the groceries. Be wary of the messages that Instagram Envy and Flexing tell our children. Counter the social media culture by having in-depth conversations on concepts your kids have yet to think about. For example:
Showing off material wealth on social media brings fans, not friends.
Teaching your kids that, rather than bringing more friends, studies have shown that people prefer to be friends with someone with a simpler lifestyle.[3] These fake friends often have ulterior motives.[2]
How does wealth affect relationships with friends? Genuine friends will always be by your side whether you’re rich or poor.
Can you have quality relationships if you’re breaking others down to build yourself up?
Wealth comes from a good work ethic.
Children are brainwashed into thinking that being disrespectful and obscene on the internet can easily roll in cash. Doing dangerous pranks, making hurtful comments, and participating in age-inappropriate activities are just a few examples. Start a discussion about how wealth actually comes about.
What is a good work ethic?
What is perseverance, and what do people learn from it? Making a sustainable income doesn’t happen overnight. Most successful people put in hours of hard work before making it to the top. Some fail a few times before catching their big break. Enduring the journey toward success will teach you more about yourself than the shortcut.
Follow uplifting social media sites created to inspire with positivity and stories of hope.
Some posts give advice or insight to encourage others.[2] That’s why impoverished children idolize the Instagram profiles of famous rappers who came from the same projects.[4] They see someone from the same struggling upbringing break the barriers for a better life.[4]
Your values define your definition of “wealth.”
People value different things, and what we value forms our idea of what wealth is. These values change throughout our lives as we learn through our experiences. As children grow through their personal journeys, help them become the best versions of themselves.
What are your dreams?
What kind of image do you want for yourself?
Do you want to help make the world a better place?
Is passion for your career worth more than money in your pocket?
Is working countless hours of overtime worth it for a fancy car?
In what ways does it benefit family life or take away from it?
These examples will help you start a mutual, complex conversation with your children so they can think further than celebrating a Rolls Royce. You’ll be able to pass on your wisdom, navigate their confusion, and give them the confidence to aim higher.
Thanks to Hanna Dangiapo for covering this modern topic! Want to learn more ways to protect your child from RiceGum-like content? Check out Dr. Bennett’s GKIS Connected Family Online Course
I’m the mom psychologist who will help you GetKidsInternetSafe.
Thanks to CSUCI intern, Katherine Carroll for researching Greenlight debit cards for kids.
