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As a financial advisor, you would think that my children’s allowance and savings plan would run like a well-oiled machine, right? Although I have read books and articles on the subject of teaching children about money, actually putting an allowance and savings plan into practice has never been easy for our family. That is, until now.

Review-of-Current-website

Saving, Spending, and Giving

After reading Ron Lieber’s book The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money, I wanted to implement an allowance program for my kids that would follow one of the book’s suggestions. Specifically, the book recommends using three different piggy banks — one each for savings, spending, and giving. This concept made a lot of sense to me but sticking with the discipline of adding money to these different piggy banks every week was tough. As any modern-day parent knows, life is busy, and things like this start off with good intentions but end up dying on the vine.

In looking for a more modern-day solution to this problem, I stumbled upon a relatively new service called “Current” — a debit/ATM card and app for teens (Note: one of my children is not a teen and the app still works for them). Current allows parents to help manage their teens’ savings, spending, and giving through a smartphone app. This solution sounded ideal for my needs so I decided to give it a try.

Getting Started

I downloaded the Current app to my iPhone from the Apple app store (it is also available for Android phones) and enrolled in the service. There is a fairly hefty annual fee of $36 per child but there is a 30-day trial period during which you can choose to cancel. However, given my trials and tribulations with physical piggy banks, I felt this would be well worth the cost if it worked as I hoped.

During the setup process, I created an electronic link between my bank account and my Current account so that I could transfer money into my Current app. The way it works is that my (the parent’s) app is the central hub, i.e., money flows from my bank account to my Current app on request or on a scheduled basis. I can then transfer money whenever I want to my children’s Current accounts. You can also set up electronic transfers that go directly into your children’s accounts on a regular basis.

A couple of weeks after the initial setup, a debit/ATM card arrived for each of my children. I then downloaded the app to my children’s phones and registered their cards to their apps. I also added the app to my wife’s phone so she could also monitor our children’s accounts. There were a few hiccups with the setup process that I was able to resolve after several email exchanges with Current’s customer service department.

Using the App

My first impression of the app was very positive. The interface is very clean and simple. I have a slightly different version of the app than my children, with more features and controls. I can easily transfer money to or from my children’s accounts on an ad hoc or regular basis. Moreover, I can set up chores with specific dollar values assigned to them. When the chore is completed, money is transferred to my child’s app and I receive a notification. While this is seemingly a great feature, we gave up on it after a few weeks. When our children failed to complete their chores, the money was still transferred to their accounts, requiring us to manually pull it back. Instead of paying for chores on an ad hoc basis, we set up a weekly allowance for each of our children.

Our children’s apps allow them to see their balances, move money back to us, and direct money to each of their savings, spending, and giving “buckets” for lack of a better term. The allowance they receive, or any amounts we transfer to them, start in their spending bucket. If they want to move money to their savings or giving buckets, they must do so manually. We require our children to move 10% of every dollar they receive into savings and another 5% into giving. The giving feature allows them to make donations to charities, although we have not attempted this yet. Our children can use the card at ATM machines and make purchases with the card (Current does not charge ATM fees as of the date of this article but most bank ATM machines do). Notifications are sent to me when they make a purchase. I can set rules within the app to limit ATM withdrawals and to prevent purchases at certain types of merchants.

Human Problems

While Current provided a pretty good technological solution to my allowance problem, it couldn’t solve my human ones. My first human issue was whether or not my children would embrace Current given that they had become accustomed to using cash. As we have two children, and each has their own unique personality, I was met with both jubilation and dread when introducing this to them the first time. While one couldn’t wait to begin using the card, the other was mortified at the potential of others finding out that they had a debit card. The second issue was a philosophical one: should my children receive an allowance only when they have completed their chores or just because they need to start learning about how to manage their money? At the risk of disqualifying myself from potential parent of the year awards, we opted for the latter. In our household, our kids have very little time between school, homework, and sports and we find it difficult to hold them accountable to a routine of regular chores. Rather, they have a number of basic household responsibilities they must complete in a given week but these duties are not tied to their allowance. When we ask them to do more time-consuming or difficult projects around the house, they can earn extra funds that we transfer to them through the Current app. Lastly, it can be difficult for teens who aren’t yet driving to get access to cash for everyday needs. We have solved for this by acting as the ATM: when they want cash, they have to transfer funds back to us via their Current app in exchange for cash (which also avoids ATM fees).

Now that we have the Current app in place, we have tried to move toward not giving our children money outside of what they have available in their Current app. This forces them to make active choices about what they want to spend on rather than relying on us anytime something comes up. Admittedly, moving them to greater independence with their spending is still a major work in progress but what isn’t when it comes to parenting.

Note: This article is for informational purposes only and does not constitute or imply an endorsement, recommendation or favoring of the product. The opinions in the article are as of March 2019 and are subject to change. Read further disclosures at https://ceritypartners.com/terms-and-conditions


Cerity Partners LLC (“Cerity Partners”) is a registered investment adviser with offices in California, Colorado, Florida, Illinois, Ohio, Michigan, New York, Massachusetts, and Texas. Registration of an Investment Advisor does not imply any level of skill or training. This commentary is limited to general information, and should not be construed as personal tax, legal, or investment advice. There is no guarantee that the views and opinions expressed in this piece will come to pass. The information is deemed reliable as of the date of this commentary, but is not guaranteed, and subject to change without notice. It should not be considered as an offer to sell or a solicitation of an offer to buy any security.


Meet the Author

Kevin Dorwin

Partner

Kevin is a Partner and Market Leader for the San Francisco Bay Area. He focuses on optimizing wealth through efficient investing, risk management, and tax strategy. His expertise includes portfolio design and management, estate planning, charitable giving, and other wealth management strategies — all designed to meet wealth-building goals of affluent individuals and organizations.

Before joining Cerity Partners, Kevin was the Chief Executive Officer for B|O|S. In this role, he provided strategic leadership, guided the firm’s investment and financial planning leadership, and advised select clients. Prior to B|O|S, Kevin worked for several large financial services companies including Charles Schwab & Company, Visa International, and Providian Financial Corporation. At Charles Schwab, Kevin was a member of the Affluent Client Group, playing an important role in helping to launch several new wealth management and estate planning services, including the Schwab Fund for Charitable Giving.

Kevin is a member of the Forbes Finance Council and was selected as one of the top 1,200 financial advisors in the country by Barron’s in 2014.

Kevin earned his Bachelor of Science in Managerial Economics from the University of California, Davis and Master of Business Administration in Finance from the Marshall School of Business at the University of Southern California. Kevin also received his Wealth Management Theory & Practice certification from the Yale School of Management and holds the Certified Financial Planner (CFP®) designation. He is a former member and past Treasurer of the Blind Babies Foundation Board of Directors and a former Advisory Council member for the Buck Institute for Research on Aging.

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