PROVIDENCE, R.I. (WPRI) – A Providence start-up, aimed at teaching children about good money habits, is preparing to launch a new app.
Finnest combines a prepaid debit card with a mobile application that allows children to save and spend their own money, according to co-founder Clemens Grave.
“We gamify the experience for kids,” Grave explained. “We make digital money more tangible.”
The average household is saddled with about $8,000 of credit card debt, according to Wallethub. Grave said he and his business partner Richard McDonald came up with the idea for Finnest to improve financial literacy at an early age.
“Most of the banks in the U.S. don’t offer any product for kids younger than probably 17 or 16,” Grave said.
“Parents primarily use digital money,” Grave added. “Kids are sort of stuck to cash, so there’s no communication around money within families anymore. We’re trying to bridge that disconnect.”
Currently, Finnest is in its pilot phase, and is being tested by kids ages 8 to 17. It is scheduled to launch in early 2018.
The app allows kids to manage their own money.
“Kids can take a picture of a savings goal, of something they really want to save up for, and to further incentivize them we enable our parents to pay interest on the kid’s savings goal,” Grave said. “It teaches the kids early on the concept of compounding interest, and we visualize this in the application, how their money grows over time.”
The bank accounts are FDIC insured, and parents are ultimiately in control of the app.
“Obviously giving kids a card seems like a big risk in the beginning. But what prepaid card technology allows us, we can restrict exactly where the card works and how much money can be spent,” Graves said.
“We form the right behavior and attitude so when it comes to the time where you actually are able to get your first credit card, you know already what does it mean to spend money with a card,” he added.
Finnest will have a yearly subscription fee of $36.
The company is one of six finalists in the Cox Business Get Started Rhode Island competition.