‘Teaching financial literacy doesn’t stop with allowances and day-to-day spending’: Family banking app gohenry surpasses 1.2 million members
- Children’s money management app gohenry accelerates expansion in the U.S., and the U.K.
- The startup has grown steadily with more than 1.2 million consumers.
Family pocket money app gohenry has exceeded 1.2 million members. The company claims it has doubled its customer base every year for the past six years. The financial education contender hit profitability in March 2020 and is now gearing up to expand its services in the U.S and the U.K.
Last week, gohenry raised $40 million in funding led by growth equity firm Edison Partners. The company intends to use the proceeds for product innovation, marketing and the company’s expansion plans.
The startup provides financial education to children and teenagers with its prepaid debit card and parentally-controlled app.
“Gohenry’s mission is to make young people aged 6 to 18 good with money by providing them with the opportunity to gain experience with managing money from a young age, in a safe environment, in a way that builds confidence and helps them develop a crucial life skill,” said gohenry’s CEO Alex Zivoder.
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The fintech enables parents to track and set spending limits on their children’s accounts. It also renders savings goals and pocketmoney incentives, such as chores and tasks, into the daily lives of children.
“Kids are poorly served today -- a smart money management app paired with a debit card and content, nudges and notifications can go a long way in helping kids and teens become financially fit and confident with money,” said Zivoder.
Financial literacy in children is imperative to paving the path for socially responsible and financially conscious adults in the future. Research by the OECD argues that without financial education, individuals are more vulnerable to debt and bankruptcy.
According to a study conducted by Cambridge University in 2013, children form financial habits from the early age of seven. The OECD advises that financial education should start at school: "People should be educated about financial matters as early as possible in their lives.”
“Parents educating and empowering their kids is powerful and necessary. We really like that gohenry’s message is not about ‘controlling’ their children’s spending. Instead teaching the value of money and financial literacy from a young age brings a lifetime of benefit,” said Chris Sugden, managing partner at Edison Partners.
As America reels from COVID-19, parents enduring economic hardships are more keen towards their children cultivating sound financial habits. “We have seen an increased urgency amongst parents to teach their kids money management skills, evident through the increase in our member numbers,” said Zivoder.
Although many traditional banks have long provided basic banking services targeting teenagers and children, these are now being countered by innovative product offerings by fintechs and incumbents alike. This is by no means a coincidence. Gen Z, which currently represents ages between 8 to 23, wields enormous spending power amounting to $150 billion in the U.S. alone.
In March, Revolut launched Revolut Junior, a bank product for children aged 7 to 17. Banks like JPMorgan Chase and Wells Fargo have ventured into teen banking services. San Francisco-based teen banking app Step offers parents and teenagers a one-stop-shop for banking services with zero monthly and overdraft fees.
Financial education for children does not have to start and end at personal finance.
“Teaching financial literacy doesn’t stop with allowances and day-to-day spending,” said Sugden.
“Helping children understand investing in the stock market and how the market works is an opportunity we see in the future as well.”