63% of Canadian parents avoid talking to their kids about money because they think they’re too young. However, it’s never too early to speak with today’s tech-savvy kids about securing their financial future. And the Royal Bank of Canada’s new Mydoh app is one way to get them interested in financial literacy.
What is Mydoh?
With Mydoh, kids take responsibility for their spending.
Mydoh is a parent-controlled bank account coupled with a fun debit card and companion app for kids aged 6 to 18.
Parents can add and track their child’s weekly tasks, instantly pay their allowance (which is different from their task payments), and use the app to keep an eye on their transactions.
Meanwhile, the Mydoh app enables children to manage and mark their tasks as complete, track their earnings and spending, and view their balance. The kid’s app pairs with the Mydoh Smart Cash Card, a reloadable prepaid card account that they can use at retail locations and online.
All of this is packaged with Play, Mydoh’s financial education element that is engaging and easy to understand. The delivery focuses on enjoyable facts and trivia, but their blog also has great long-form content.
How Does Mydoh Work?
Parents must visit the Apple App Store or the Google Play Store and download the Mydoh app to set up an account. You then log into the app with your standard RBC details or by using a Government-issued ID. There is no credit check involved! It is then a matter of adding your child or children to the app. Simple!
Once your child adds the app to their phone, they can access the previously-noted features. These features include:
- Tracking and marking their tasks as complete
- Viewing their earnings, deposits, spending, and balance
- Accessing Play to learn more about personal finance
They use the physical Mydoh Smart Cash Card to buy items in-store or online. This capability is invaluable; essentially, you can teach your kids about inflation as they spend (e.g., how their purchase power is affected by the broader economy).
The Mydoh Smart Cash Card works anywhere retailers accept Visa debit and credit cards. Kids can swipe or tap the card to make in-store purchases with no PIN. However, the card does not support cash withdrawals.
The Basics of the Mydoh App
The Mydoh app is fun for kids to learn money management basics. It also gives them an idea of what it’s like to have a debit or credit card.
At the heart of the Mydoh app are task tracking and completion. These tasks can be one-time or recurring. Parents add their child’s tasks (chores or otherwise) to their app, and the child completes them to earn their allowance. The minimum amount a parent can set for a task is $0.25.
Payday is always on Saturday. Having a set payday teaches kids about budgeting while awaiting their weekly deposit. Saturday can also be the day you have a weekly chat with your child about their previous week’s expenses. This consistency will keep the financial conversation going and cement some of the ideas they’re learning on Play.
Earning from tasks should not be confused with allowances paid by the parent. Task earnings are precisely that: compensation for a job well done!
The Importance of Financial Literacy for Kids
It is now 2022, and there are no longer excuses for not teaching kids about money. We know that sounds a bit harsh. But, everyone wants what is best for their children. Sooner than later is the best time to start having financial conversations with your child because it will impact every aspect of their life.
In doing so, you’ll give them the knowledge needed to manage their finances as adults. Furthermore, kids should continually learn about personal finance, from childhood all the way through to adulthood.
We often assume our kids will learn about managing money if we do a good job teaching them other life responsibilities. Unfortunately, this is not the case, as all money matters in adulthood can be unique.
Empowering Our Future
It’s well known that “knowledge is power.” This concept applies to sound financial management.
Kids should know about money, budgeting, and credit as much as possible. This information will equip them to be responsible and secure their future early in life. Conversely, a lack of financial knowledge can prove dangerous.
We go to school to learn about math, science, and history to empower us with knowledge. The same emphasis should always apply to a child’s financial literacy.
Teach Them Now, Save Them Later
Typically, children who don’t receive financial education end up doing a poor job managing their finances as adults. Many of their inadequate adulthood skills centre around poor money management.
For example, financially illiterate children usually grow up without understanding how to invest their earnings. They also have trouble saving for a home. In addition, they may have poor credit scores.
Conversely, kids who learn about money while they’re young generally avoid these problems. As a result, they’re better able to make informed financial decisions. But, again, this capability comes from the training they received when they were young.
Set The Foundation for Your Kids’ Success
Without financial education, it’s easy for kids to pick up bad money habits. For example, they’re more likely to get involved in gambling.
Also, it’s easier for someone to influence their financial decisions. This means someone could more easily convince your kids to engage in unwise economic activities as an adult.
However, with solid financial foundations, others are less likely to influence your children in the future. As a result, they can more easily avoid poor money habits. For instance, kids are less likely to participate in activities like gambling, investing in a Ponzi scheme, or getting into deep debt.
Hope for the Best
Financial education also helps your kids prepare for emergencies. Nearly everyone faces an urgent financial situation at some point that costs a substantial amount of money.
If your child is financially literate, it’ll be easier for them to adapt to the situation. They can better deal with the unexpected. They may even get through the issue with maintained financial health.
This can all result from your efforts to educate your kids on saving, spending, credit, debt, and investments.
The Advantages of Financial Literacy
Strong, early financial literacy has many benefits. For instance, it helps kids understand the value of money. This value is only learned by hard work and the resultant earnings. This value also comes down to needs vs. wants and the difference between the two. This topic is often the toughest to teach young adults as they independently enter Canada’s financial system.
Financial literacy means more savings, less debt, strong credit, and better investments.
Financial literacy means more savings, less debt, strong credit, and better investments. It provides the knowledge to make money work for you and create wealth.
Financial education means less stress in the future. Who wouldn’t want this for their children?
Mydoh is Award-Winning Good
In 2021, Gartner chose its financial services award winners in the Americas. The GartnerEye on Innovation Award for Financial Services recognizes the innovative use of digital technology.
To compete for the award, organizations presented case studies during an online event in October 2021. RBC Ventures won the virtual event with its Mydoh app. So if you’ve been looking for the best personal finance app for kids, Mydoh is the sure winner.
Underlying Technology and Security
Royal Bank of Canada states that they are “seriously secure.” As Canada’s largest bank, we believe them (they’ve had 158 years to figure it out).
With RBC’s technological backing and Visa as the card front-end for purchases, we see this as a winning combination. Furthermore, given the intuitiveness of the app (and its likely similarities to RBC’s regular banking app), there will likely be many Mydoh to RBC conversion clients as Mydoh users reach adulthood.
So far, Mydoh has yielded positive results. More than half of all kids and parents who download the app use it actively. RBC studies show that all it takes is a parent putting that first dollar into their child’s account. In this case, kids’ chances of using Mydoh for more than a month go up by over 85%.
Using Mydoh to Your Advantage
As adults, most of us think about money continually. However, it can prove challenging to talk to kids about money.
Kids do not automatically understand the value of money. There’s no precedent for them to associate value with a currency. It is just something parents have that they sometimes get to buy something. That’s where Mydoh jumps in.
Earning money through the Mydoh app helps kids to learn responsibility. For example, they could save up and pay the annual cost for a most enjoyable activity. Or, they could also use their earnings for an occasional treat. The possibilities are endless.
Day-to-Day Use of the Mydoh App
A Mydoh account makes it easy to transfer money from your account to your Mydoh wallet using the app. You can then transfer money to your child’s Mydoh Smart Cash Card.
The Mydoh app does make things easier. Imagine your child earns money to complete a chore at home and earns money from helping out a neighbour.
Your neighbour can use INTERAC e-Transfer to pay your child. Then, you can transfer your child’s payment for doing chores at home using the Mydoh app.
Now, your child can see their total earnings when they log into the app. Also, when they want to buy something, they’ll have a card they can use to make the purchase.
Using Mydoh to Make the Connection Between Work and Earnings
Mydoh comes with preloaded tasks you can assign to your kids. You can also create custom tasks.
The app allows you to assign one-off, weekly, or recurring tasks. You can also use the app to give different tasks to your children.
For instance, one child might mow the lawn while the other feeds the family pet. They check off these tasks in the app to earn money.
Payday happens every week on Saturday. The app will transfer money from your Mydoh wallet to your child’s Mydoh account.
Your kids are learning about money, earning some, and saving it!
Start Planning Now for Your Kids’ Future!
The Mydoh app is an innovative tool that allows you to empower your kids with financial literacy, and it’s a great start in helping your kids prepare for the future.
Speaking of the future, it’s also a good idea to help your kids prepare for higher learning. With this in mind, feel free to visit our post about bank student loans in Canada.