SCOTTSDALE — These days kids use a piggy bank, like adults use a VHS -- they're relics! Now, a new app is teaching kids how to save and spend smartly.
Gregg Murset has been a financial planner in Scottsdale for 20 years. He says he started to realize that his most successful clients always had the same two traits: they work hard and manage their money.
Naturally, he wanted to teach those skills to his own six kids and set them up for success at an early age.
Murset created BusyKid, with the first goal being to create a payment system for chores that better suits the cashless world we now live in.
"I've done it, a lot of times. I tell them, 'I'll pay you $8 to wash the car.' Then they wash it, they bust it out, get it all done and then, I don't have $8 because I don't have cash," he said.
Through the app, kids and parents verify when chores are done. Parents get a weekly reminder that payday is Friday and when approved, it automatically moves the cash from your bank account to your kid's account which is set up through Murset's financial planning business. The money is then automatically divided into three buckets: spending, saving and sharing.
Kids can be given a BusyKid Visa debit card to spend 50 percent of their "paycheck" when they want, as long as Mom and Dad approve their request for transactions. Murset says that's the first step to teaching kids the value of a dollar before they swipe.
"They want some new shoes, whatever it is, you say 'Great, pull out your card and knock yourself out.' All of the sudden you're making them pony up," he said, "Now they know, 'if I want that toy, I have to walk the dog, do the dishes, wash the car' and then they buy it, it breaks and now they realize what buyer's remorse is and spend smarter next time."
The other percentage of their allowance goes into savings and sharing. Within the savings account they have stock options, sorted by company icons any kid will recognize so they can buy shares, track the progress and learn the basics of managing stocks at an early age. BusyKid has a partnership with a financial planning service so there's no brokerage fee to manage the portfolio.
"All of a sudden you have a kid who's not only watching Netflix, but also watching the stock and understanding what's going on."
The final piece of their paycheck is dedicated to sharing, or donating, through a list of charities where kids can also click and learn about each one and how their money will benefit the cause they choose.
Parents still have control to readjust the rate of pay for various chores or the percentages that are moved into saving and sharing but the app does start with suggested amounts.
There's an annual app fee of $24.99 but there's no cap on how many family members you add to it. The debit card costs $7.99 a year.