This link came to me courtesy of the folks at Brainish, who run a free interactive math web site. You might want to check them out too!
PAYjr is an interesting way to manage allowances and to teach your kids about earning, spending and budgeting. The program offers parents two options: 1) Teens 13+ can be given a Visa Buxx card, and 2) All kids, including those 12 and under, can be given instead a reloadable Target gift card. Both methods involve the parent loading the card with money that the child can spend in stores or online.
The Visa Buxx card is issued in the teen’s name and can only be used by him or her. It is what’s called a stored value card, and it can be used either as a credit card or a debit card. Use it like a credit card (sign the receipt) wherever Visa is accepted. Use it like a debit card when needed, for example at the ATM to withdraw cash. You will be provided with a PIN number for this purpose.
The Target card is a gift card with no specific name assigned, so anybody can use it. It is reloadable and, unlike so many gift cards today, it has no expiry date to worry about. It can be used in Target stores or in the Target online store. Target cards have no minimum age requirement. When you feel your kids are old enough you can use this option.
Payments work like this: parents can choose to set a recurring allowance that is paid out to the card on a regular basis, or they can make one-time payments instead. There is also a Chore Management System, which allows parents to pay their children only when certain chores are completed. The parent selects chores and sets the frequency of each one. Once the chore is complete the child logs into the system to check it off. Parents can set up the account so this also requires parental approval, or the chores can be logged just by the child.
Each completed chore adds a certain amount to the running tally of money owed to the child. Parents set a Chore Threshhold and when this amount is reached the funds will be transferred to the child’s card. Parents can prevent pay-out by declining a completed chore & assigning it to be re-done, or by clearing the child’s entire balance. No worries about not being able to withhold allowances if the kids are misbehaving!
Benefits of using a system like this include a more fun way for the young ones to track their chores (no more sticker charts!) and a financial incentive for kids and teens to participate in the running of the household. Parents don’t have to chase after kids to see if the chores are done, because they can configure the system to alert them when chores are checked off or when it seems a review of chores assigned might be in order. These alerts are sent by SMS or email, so Mom & Dad can keep track of what’s happening at home even when they’re on the go.
There are some fees involved with either setting up or loading the cards, depending on which type of card you choose. For example, loading the Target card has an associated fee that is considerably larger if you load from your credit card than from a chequing account. There are also some tricks to know. For example, using the Visa Buxx card as a debit card will involve a fee but using it as a credit card does not.
Parents do have to supply their personal information when signing up for an account. So be prepared to hand over your address, birthday, banking and credit card information, and Social Security Number. But you can rest assured that the PAYjr program is certified by VeriSign, TRUSTe and the Better Business Bureau.
Visa Buxx cards cannot be used to buy lottery tickets, alcohol or firearms, or at online casinos. You can also feel safe in knowing that your child can only spend what is loaded onto the card. Because the card is not directly connected to a bank account, it is more secure than giving your child a debit card or allowing them to use your credit card. Lastly, you can set up alerts to monitor spending if you want to oversee how they are using their card.
There is an Education section on the PAYjr web site where parents can read articles and find tips on teaching their children about finance, budgeting, and credit. (My favourite tip was not to bail your kids out if they overspend and don’t have money left for something they needed!) Kids can also use this section to take quizzes or to play with one of the fun calculators that tell things like what their parents’ allowance would be worth in today’s money. You do not have to be a registered member to use this part of the site.
Best I can tell, the cards are only available to US residents for the moment, but do keep your eyes open as this option may become available internationally as well.
A system like this would be a good way to teach kids what it is like to work for a salary and have to pay for expenses on a regular basis. Or it could be used to teach a younger child to save for a specific purchase. When multiple regular expenses (e.g. related to a car, or fees related to a sport or hobby) are involved, this would be a good opportunity to teach about budgeting. You get the idea!
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Tags: allowances, chores, finance, Public Education
