DALLAS — Texans Credit Union is taking financial literacy to a new level.
The $1.7 billion credit union has teamed up with local firm PAYjr, to offer an innovative online financial tool designed to help parents and teens work together on money management skills.
A three-phase program that centers around an interactive online allowance and chore system, PAYjr helps instill work ethics in kids and teens by rewarding them for a job well done.
Here is how it works. Parents choose household chores online, designate a dollar value for those chores, and provide a financial reward when chores are successfully completed. Each of these activities is tracked on the PAYjr Web site (www.payjr.com), where parents and kids work together to manage expected responsibilities to earn allowance.
Once parents' approved chores have been completed, money can be transferred from their checking account to the teens' Texans CU branded prepaid debit card. Parents can set limits on how much is spent per day. The third phase, geared toward younger children, allows funds to be transferred directly into their kids' savings accounts. Text message alerts when funds are deposited help keep teens and kids engaged.
"We thought it would be a nice fit for us," said Texans CU Vice President of Product Development Chris Walton. "No one in this market is doing something like this–it promotes smart saving practices while encouraging a good work ethic and a sense of financial accountability all wrapped in one package." A 2004 survey from Visa USA found that 56% of parents believe high school graduates are totally unprepared to manage their personal finances responsibly. And according to another recent survey, 34% of high school seniors said they were "not sure at all" or "not too sure" about their ability to manage their own finances. Sixty-six percent said they were "somewhat sure" or "very sure."
Financial literacy of youth has been a primary mission of PAYjr since its inception. Four years in the making, the final turnkey program evolved from trying to provide a safe payment mechanism for teens to make purchases online.
"We originally were thinking of creating a safe online store for teens where they could make their own purchases and parents would still have some control over the shopping experience," said PAYjr CEO David S. Jones. "As we did more research we realized there was a bigger need here in terms of personal finance and management education and thought a chore management program would be a great first step."
Jones said when the site launched in April of this year, since it didn't have the ability to transfer funds he didn't think it would generate too much interest. He was wrong.
"We had thousands of families using it," said Jones. "We read an article about Texans CU reaching out to the community and thought they might be interested. Really they helped take this program to the next level."
Jones said since the turnkey package can be customized it can help credit unions that don't have the scale to create their own teen programs economically.
"It is an opportunity for credit unions to set their financial literacy program apart by involving both parents and children in money management," said Jones. "It's also a great way to show the community how committed credit unions are to improving financial literacy in the areas they serve." The free Chore and Allowance Management Web site rolls out this week. The prepaid debit functionality and savings component are slated to be launched by yearend.
–mdigiovanni@cutimes.com
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