Limitations of the Piggy Bank and Traditional Bank
Some of the most common ways parents educate their children is by giving them money for their piggy bank or a joint account at a traditional bank. Piggy banks and traditional banks are both good because they expose kids to money and allow them to practice saving. However, both have significant limitations and you should consider a savings trackers, like Guardian Savings, instead.
Piggy Bank Limitations
Unable to easily see total amount: This hampers a child’s ability to budget and prioritize… how do you budget when you don’t know the size of the total pie?
Unable to see transaction history: A history of transactions is important for reflection and learning from spending mistakes.
Inaccessible when you are out and about: What is the point of having money if you can’t access it when you want to spend it?
“I can’t spend the money in my piggy bank because I don’t have it when I am away from home”
- 8 year old from Guardian Savings focus group
Joint Bank Account Limitations
Trips to the bank make access difficult: Parents aren’t eager to make a detour to the bank just so their child can deposit $10.
Not designed for kids: Online portal and account statements are built for adults, not kids, making them confusing and hard to understand for most children (and even many adults!).
May be expensive: You can incur costly fees if minimum balance/activity is not maintained. A surprise $5 monthly fee on a $100 balance will teach kids to distrust banks.
“I set my kids up with ATM cards when they were very young… The trips to the ATM never really happened. The cash just goes from parent to kid with no actual accounting or record-keeping.”
Summary
The whole reason you give your child some money or allowance is so that they get practice earning, saving, and spending money. Piggy banks and join bank accounts limit children's abilities to practice these essential financial skills. Digital piggy banks, like Guardian Savings, create more opportunities for your kids to practice spending and provide additional opportunities for teaching moments.
Summary of Benefits: Traditional money education tools vs digital piggy banks
| Benefit or Feature | Piggy Bank | Traditional Bank | Digital Piggy Bank | Guardian Savings |
|---|---|---|---|---|
| Visibility of total Savings | ⬤ | ⬤ | ⬤ | ⬤ |
| Visibility of transaction history | ⬤ | ⬤ | ⬤ | |
| Access when out and about | ◐ | ⬤ | ⬤ | |
| Child-friendly Design | ◐ | ⬤ | ⬤ | |
| Incurs no fees | ⬤ | ◐ | ⬤ | ⬤ |
| Parental control of spending | ⬤ | ⬤ | ||
| Rewards for responsible behavior | ⬤ | |||
| Analysis of spending | ⬤ | |||
| Designed for needs vs wants analysis | ⬤ | |||
| Designed for long-term thinking | ⬤ |