Have you wanted to set up an allowance system for your kids but struggle with consistency?
It’s so easy to forget to take out cash or to miss a weekly allowance. Or even mix up those money jars.
Cash allowances can also be problematic when you’re at the store, and your kids want to buy something but have no idea how much money they have saved up at home.
Or “forget” they spent their $20 already on a Lego set.
Greenlight is an app that helps parents automate allowance-paying in the digital age with a prepaid card for kids, and it’s fairly seamless.
With Greenlight, you, the parent, become the bank. And you control funding onto prepaid debit cards your kids can spend anywhere. The Greenlight allowance app is your online bank interface (and Greenlight accounts are FDIC insured).
Greenlight was founded in 2017 with the mission to “help parents raise financially-smart kids.”
Through the Greenlight app and prepaid debit cards, kids can get real-world experience in managing their money. And you can automate and oversee kids’ spending with security features built-in.
Greenlight allows you to set up “accounts” for up to five children, which you can control from the app.
You can divide their allowance up into Spending, Saving, and Giving categories, by percentages. You can even set up interest in the Savings category so your kids earn rewards for saving their money.
Your kids download the same app on their phones (if they don’t have phones yet, they can check on your app). They can view how much money they have in each category, their approved list of stores, and their spending history.
Worried about handing over a debit card to a young child?
There are benefits to teaching your kids about debit cards and using them responsibly, while they’re young since we live in an age of digital money.
While giving kids cash definitely teaches them what money is, giving them a prepaid card requires them to keep track of their spending.
It teaches them the importance of setting a budget and provides real-life experiences like making sure they have enough money in their account to pay for their purchase (if not, the card will be declined).
Using a debit card gives you several security features cash doesn’t provide.
Should the card be lost or stolen, you can deactivate it with the click of a button on the app. If your kids are out with friends and run into an emergency, you can instantly transfer funds to their account.
Plus, you get notifications every time your kid spends so that you can follow up with them.
How Does Greenlight Work?
Get the App
To start using Greenlight, you’ll download the app. You’ll need to link your bank account, and this is where you’ll pull from to set up your Parent Wallet. The company uses the same encryption technology as banks do, so it’s secure.
You’ll need to provide your name, address, and SSN, plus your date of birth (that’s because of the US Patriot Act which requires financial institutions to verify account holders’ identities).
How to Set Up Your Parent Wallet
Your Parent Wallet displays your current balance and allows you to set up AutoFunding. It also records your funding history (including exactly how much money you’ve given to each child each week).
Transferring money from your bank to the app is free, and takes a day or two. You can also set up an AutoFunding option to have the app fund a certain amount, say $50 or $75, per month, into the wallet.
Set Up a Weekly Allowance
Then, set up an automatic allowance amount per week, and decide what percentages of allowance go to which category.
For example, if you decide to give each child $5 per week, and would like them to save 25% and give 10% of the total, then Greenlight will automatically send $1.25 to Savings and $.50 to Giving.
“Greenlight” Where Your Kids Can Spend
Greenlight allows you to pick the stores where your child can spend. So, if you’d like them to be able to buy a toy at Target, but you definitely don’t want to allow spending online at Amazon, then you can “green light” the stores you want.
You designate how much of their spending money your kiddos get to spend at each store. Kids can also pull money from ATMs with the app.
Check Out Security
If your child loses his card, you can deactivate it instantaneously on the app. This makes it easy if you worry about them misplacing or losing the cards because you can go on the app anytime and check balances.
Upgrade Your Kids’ Cards, Or Don’t
Greenlight pushes its upgraded debit cards, which have personalized photos of your kids on them, for $10 each. But their non-descript green cards, which they send at no additional cost, work just fine.
Have Your Kids Download the App
Your kids, if they have phones, will download the same Greenlight App but will have a different interface than you.
They can see their weekly allowance and balances in the Spending, Saving, and Giving categories. They’ll see where they can spend their money–if you’ve allowed them to spend anywhere, or if you’ve designated a portion or limit for specific stores, like the movie theater or the gas station.
Set Up Chores
The app’s biggest weakness is its Chore Feature. You can set weekly chores for your kids to do, and decide if they are daily or weekly chores. But the Greenlight app will not automatically withhold allowance if your kids indicate they haven’t completed chores.
You have to manually check whether they’ve ticked off the chore boxes, then withhold allowance if chores aren’t done. Then, you have to remember to turn the allowance back on once they complete chores.
Also, doing chores isn’t tied to earning more money, as the app indicates. There’s no way to have your child earn a specific amount of money for doing a certain chore, a feature that the app should remedy.
While you can manually transfer money once your child completes a chore, it would be nice to have an automated feature.
Pay for It
Greenlight is $4.99 per month, which is taken directly out of your Parent Wallet.
That monthly fee covers up to 5 kids, so the app would cost you $1-$5 per child, per month depending on how many you have. Transfers from your bank to the card are free.
Greenlight vs Other Allowance Apps
While Greenlight is one solution, there are many other allowance apps on the market. Here is a quick look at two popular options.
If you’re wary of giving your child a debit card, FamZoo might be the solution for you. The company gives you a choice for setting up allowance spending, either a prepaid debit card or an “IOU” system.
The debit card works a lot like Greenlight’s. The IOU system, though, allows you to track the money you’re holding for your kiddos in another bank account, so they can spend the money you’re holding for them. You need to input your transactions manually with this version of the app, however.
You can also set up debit cards in FamZoo similarly to Greenlight, where your kids can also receive funding from other sources, like an employer direct deposit. If your child has a job, this is a great option.
FamZoo allows you to give extra funds if your kids complete certain chores. They also allow you to set up a matching percentage in Savings as an incentive for your kids to save more.
If your child wants to take a “loan” out of their savings, they can do so, as long as they pay interest and pay it back within a certain time frame.
FamZoo is one of the oldest apps on the market. It was founded in 2006 by Bill Dwight, a father who wanted a hands-on way to teach kids the concepts of personal finance.
Pricing for FamZoo is $6 monthly per family for up to four kids. Or as low as $2.50 per month if you prepay the year.
Gohenry is similar to Greenlight and FamZoo, but it allows kids to earn money for the completion of chores. It also lets you set weekly spending limits and choose whether the card can be used in-store, online, or at the ATM.
With gohenry, you can set a weekly allowance amount if chores are not completed, and a different amount if they are. You can also set up an option where your child gets paid for completing a specific chore.
Your kids can set up savings goals in the Savings category, to see how much more they need for a specific item.
The company has partnered with Boys & Girls Club of America, and your child can decide to give a small amount each week to them or another company.
Gohenry costs $3.99 per month, per child. If you have a lot of children, this may not be the solution for you.
If you’ve never considered using a service like Greenlight, FamZoo, or gohenry to manage your kids’ allowance, give it a try.
You can cancel anytime if you’re not satisfied.
But chances are you’ll be thrilled, and your kids will be equally delighted you tried it out.
“Women Who Money is sponsored this month by FarmTogether. Our sponsor is not responsible for and has not influenced the creation, selection, or presentation of content or other information or resources provided on this site.”
An Allowance System that Works [Greenlight Review] is written by MoneyWomen for womenwhomoney.com