App Helps Parents, Children Become Financially SavvyBy Yael Israeli | Tue, 07/21/2020 - 09:16
“What do you want to be when you grow up?” That is a question that accompanies everyone during their childhood and often into adulthood. Regardless of what the answer might be, there is one constant that traverses every industry and every job title: how to manage the money that is earned. Parents want to prepare children for the brightest future, giving them the skill set to succeed at whatever path they choose, though often overlooking money management completely.
Sadly, when it comes to financial habits, most start the learning process too late. According to a new study by researchers at Cambridge University in England: “The habits of mind, including financial ones, are largely determined in the first years of life.” So, who is responsible for teaching this to children, parents or schools? Ideally both, but in reality, according to the OECD PISA 2018 study, “94 percent of financial education happens at home.” Despite what they invest in their children’s formal education, it's up to parents to develop and instill healthy money habits in their children.
This might not be so simple if the parents themselves aren't the best example to teach, especially as in the case for Latin America. In Mexico, CONDUSEF reported that 70 percent of the population does not have a financial education. Parents often lack the tools necessary to raise financially-responsible children, so it remains largely an untouched subject within families.
The best opportunity that parents have to teach their children about money management is through the weekly allowance. However, throughout Latin America, parents continue to give their children pocket money in cash, missing the chance to form good habits in how money really works in today’s real world, where 92% of currency is in digital form.
That’s why Mozper, a debit card and app designed especially for kids and parents, is partnering with parents in Latin America to raise a savvier generation that will spend better, save better and overall be able to generate financial stability in a way the region has not seen due to a historic lack of financial education.
According to the latest OECD PISA 2018 financial literacy results, “confidence in using digital financial products and services was associated with stronger financial literacy performance.” Financial products give kids hands-on practice of the subject matter, making them more capable and competent in managing their finances in adulthood once they have earning power.
Through the Mozper app, parents can give their kids an allowance, set spending rules, assign chores and even create and track savings goals. The child-mode of the same app allows kids to keep track of their money, request additional funds from their parents anytime and anywhere, and earn money for completing chores. In this way, children get a hands-on, real-world financial education appropriate for the digital era.
With the new wave of neo-banks, financial products have increased in accessibility but with a lack of financial education on how to use them, what was meant as tools that help can easily turn into weapons that hurt.
Financial education is the one thing parents can give their children that will directly impact their success in the future.
The relationship children have with money will last their entire lives. No matter what career path they choose, giving them the right foundation will help them more universally than any other skill.
About the Author
Yael Israelí is an executive with more than 14 years of experience in investment banking, consulting and entrepreneurial ventures. Today, Yael is the CFO of Mozper and treasurer of Mujeres Brillando, a foundation helping women entrepreneurs develop their businesses.
About the Company
Mozper is a debit card and app designed for kids and parents in Latin America. We let parents give their kids an allowance and set spending rules so they can't blow it all on video games. Parents can also assign chores, and track savings goals. In this way, children get a hands-on, real-world financial education appropriate for the digital era. Mozper is launching an invitation-only beta in Mexico. Just in Brazil and Mexico, more than US$10 billion are given each year in cash in allowances.