No doubt we live in a consumer-oriented society that with cyber-powered communications can keep us focused on spending at any cost. The recent partnership between teen idol, Justin Bieber and SpendSmart is worthy of examination in this regard.
SpendSpart is a prepaid credit card service designed to help parents teach financial literacy to their children, by giving parenting tips; incorporating forms for budgeting, saving and tracking spending trends similar to corporate account managements systems; gives parents real time visibility of spending decisions through text alerts; and the ability to turn off the card from their smart phones.
The SpendSmart teen idol spokesperson, Bieber, is offered up as a role model because he comes from very humble, low income circumstances and can speak with some authority as a young person about the value of budgeting and saving (see video on the left).
Marie Hall, co-founder of BeMoneySmartUSA in Carmichael, is a financial literacy expert who specializes in training youth about how they can secure employment and manage their money to build wealth.
One of the first lessons she teaches teens in her workshops is to beware of banking fees, which SpendSmart has plenty: $3.95 monthly charge to keep the card active; an additional $3.00 every time the card is not active over a 90-day period; $7.95 card replacement fee; ATM fees of .50 cents for every balance inquiry; and $1.50 every time cash is withdrawn.
“Parents would be better off helping their teen open a bank account with a local credit union that works with teens,” Hall said, “and avoid all those fees.”
Hall is also concerned that this teen idol debit card is not necessarily teaching youth the right lesson. “Justin Bieber could write a book or produce his own videos about the lessons he learned when he and his family were struggling financially,” Hall said. “Backing this debit card is clearly a huge win for SpendSmart and Bieber.”
In the Fox News report, Bieber is paid $3.75 million for a 14 month contract and royalties linked to the growth of the card.
So why purchase an expensive prepaid debit card service to teach financial literacy lessons?
Teenagers respond well when we pay them proper attention, and perhaps the real value of SpendSmart is that it is bringing visibility and conversation about managing money into the teen-parent relationship in a way that makes use of texting and mobile apps, which is the main mode of communication for teens.
This can be accomplished without an expensive debit card.
Hall recommends parents check out some of the other spending and money management trackers that are free, and can be downloaded as a mobile app. Some examples include:
To learn more about the financial literacy training and teen employment center in Carmichael, go to BeMoneySmartUSA, and visit their Farmer’s Markets..
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