The way that children manage pocket money is changing with a new range of phone apps that can help them budget using a 'digital' piggy bank.
The days when youngsters would hoard coins in a pot or glass jar are long gone – along with the idea of smashing them open to buy comics and sweets.
Now, many are being encouraged by their parents to use apps that help them learn how to budget – as well as enabling parents to keep an eye on their spending.
One of the most popular is Gohenry. It is also one of the most expensive at £2.99 a month, but it includes a pre-payment contactless Visa card that can be used by children aged six and above under the supervision of their parents for buying goods and services – either online or in a shop.
Popular: The apps, whose charges are shown in the table below, come with prepayment cards
The service also blocks purchases from certain websites, such as those involved in gambling or pornography. In addition, it can be used to access money at a cash machine.
Pocket money is automatically transferred to the card on a regular basis via bank transfer, while there is also a feature that allows parents to list chores that they expect their child to perform – such as tidying their room. When they are completed, the parents can add extra money to the card.
The first monthly top-up is free, but after this there is a charge of 50p. Children can also set up savings goals within the app and put aside a percentage of their weekly pocket money to help achieve their savings targets.
The cards come in a range of attractive designs – from a sunglasses-wearing pineapple to a football player. The cards do not allow overdrafts and parents are notified of all spending.
Another similar app is RoosterMoney. Children from the age of four can use a free 'star and reward chart' facility, learning how good behaviour can result in financial reward – without any money changing hands.
But from the age of six, the app permits children access to a pre-payment Visa card.
The RoosterMoney app monitors saving and spending and can be viewed by both children and parents.
The full app service with the card costs £24.99 a year – equivalent to £2.08 a month. Parents can add money ten times a month for free, but thereafter pay 50p per top-up.
The Osper app offers a prepayment card – Mastercard rather than Visa. It works like other apps in that parents can add money to the card and keep tabs on how their child uses it.
It costs £2.50 a month and levies no charge for regular automatic payments made on to the card via direct debit. Any ad hoc top-ups cost 50p.
Nimbl offers an app with a prepayment card by Mastercard for £2.49 a month. The app includes a handy feature for thrifty youngsters willing to set aside anything from 5p to £5 into a separate savings pot that is shown on their app. It does not charge for card top-ups.
Damien Fahy, founder of website Money to the Masses, is a fan of these apps. He says: 'All these apps offer a great introduction to financial budgeting for children.
'But if I was being harsh, I would say they fall short in one key area – and that is in understanding the true value of money.
'This is often only acquired through money education in schools and habits instilled in them by parents.'
Fahy also points out that although the apps introduce the idea of rainy day saving, they do not pay interest on any money designated for saving.
He adds: 'One of the facilities I do like on apps such as Gohenry is being able to write a task on the app as a parent – such as emptying the dishwasher – and set the payment for completing this chore.'
Although the apps do not look expensive, the cost for what is effectively a prepayment card connected to a fancy app can amount to more than £30 a year. There are also the top-up charges to consider.
So only get one of these apps if teaching your children good money habits is the objective. The only financial winner, short term at least, is the app provider.