This guide is sponsored by Greenlight. Its prepaid card for kids gives busy parents a digital way to assign chores, pay allowances and teach children the importance of earning, saving and giving.
Piggy banks haven’t always been shaped like their lovable, round namesake, though people have tucked away money in some form of them for centuries. The piggy bank continues to evolve in today’s digital age with virtual accounts, prepaid debit cards and cryptocurrency support.
The history of piggy banks is shrouded in mystery. But most theories include some mention of earthenware vessels people began depositing coins into for storage or saving.
A popular theory originates from Extraordinary Origins of Everyday Things by Charles Panati. Published in 1989, the book blends history with speculation to explain the origin of everyday items, including beloved piggy banks.
Panati alleges that piggy banks came about in the Middle Ages with people creating dishes and pots out of an orange clay called “pygg.” These containers came to be called “pygg jars,” though they weren’t initially shaped like a pig. Potters eventually began casting banks in the shape to match the name. And soon, “pygg bank” became “pig bank” and ultimately the “piggy bank” as we know it today.
Etymologists disagree with Panati’s claim, it turns out. The etymological site World Wide Words says there’s no such thing as “pygg” clay.
An alternative theory is that the word “pig” was simply used to describe all types of earthenware products, including items with a distinctively “pig” shape. In fact, the Scottish had coin banks called “pirlie pigs”, likely derived from the older Scottish word “pyrl,” or to thrust or poke, referring to the action of inserting a coin into the slot of a money box.
Whatever the etymology, the idea of piggy banks is a global phenomenon, with one of the earliest examples originating from Indonesia — dating from the 15th century — currently held by the Metropolitan Museum of Art.
Research suggests that kids as young as 3 can understand basic money concepts. And many money habits are set by age 7, according to behavioral experts David Whitebread and Sue Bingham of the University of Cambridge. And piggy banks remain a tried-and-true financial literacy tool to teach kids about saving.
As a savings tool, piggy banks started as one jar for storing coins. Most families today use at least two banks, one for everyday spending and another for saving, with many parents throwing in a third bank for giving or charity.
By managing multiple piggy banks, children learn to plan for the future, differentiating money they can spend now from cash saved for a larger reward in the future.
As technology evolves, so do piggy banks. Fintech companies are building on digital payments and contactless purchases by partnering with banks to create digital banking products for kids.
These fintechs are designing tools that help children manage their savings, spending and giving money from one intuitive app. Instead of cash, kids are given a prepaid debit card with built-in parental controls that families can customize to build financial responsibility. The popular kids banking fintech Greenlight lets parents receive real-time notifications about their kids’ spending and block them from using their card at specific stores. Plus, its chores and allowance tools let parents create weekly tasks and conveniently pay allowances without a trip to the ATM.
The evolution of kid-friendly digital banking isn’t expected to stop at prepaid debit cards. Chase First Banking is an example of traditional banks collaborating with fintechs on kids banking. Backed by Greenlight, Chase’s all-in-one kids account allows little ones and teens the latitude to learn how to manage their money safely.
In the vein of teaching kids about saving and building long-term wealth, more companies are offering the ability for kids to buy stocks and ETFs directly. For instance, Greenlight Max provides kids with research tools designed to help them learn about investments from the pros at Morningstar. If your budding investor wants to make a trade, they can send you a request, which you can then approve, edit or decline.
Strive, a crypto-focused tech company, is further changing the piggy bank game by offering the world’s first physical piggy bank integrated with cryptocurrency wallets.
The parent app allows you to manage your kids’ chores and schedule crypto payments to your child’s crypto wallet. The physical piggy bank’s interactive display shows your child’s crypto wallet in Bitcoin or Ethereum and your local currency, so your little crypto investors always know how much they have.
Whether you use a physical piggy bank or digital account, the steps to teach your kids healthy money habits are the same.
Children need a reliable source of income before they can learn how to manage their money. Funds can come from a job, completing chores or a weekly allowance.
Use our kids’ chore calculator to get an idea of the going rates parents pay for completing specific household tasks. The amount varies by where you live, your child’s age and the chore.
Calculate how much to pay your kids for completing their chores by selecting your state, child's age, child's savings goal, and chore.
Which days will this chore be completed on?
| Chore | S | M | T | W | T | F | S | Rate |
|---|---|---|---|---|---|---|---|---|
| Add chores to work out weekly total | ||||||||
| Weekly total | $0 | |||||||
Your child is 0% toward their weekly savings goal of $0.
Chore rates are based on suggestions from experts. See our methodology.
| Mon | Tue | Wed | Thu | Fri | Sat | Sun |
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If you complete all of your chores each week, you’ll make $0. This is 0% of your weekly savings goal!
Using one piggy bank muddies the water between what they can spend now versus later, because the money comes from the same pool. Teach your little one about spending and saving by separating money into two buckets — three if you want to include charitable giving.
A separate savings bucket clearly earmarks the funds for the future and reinforces your kid’s ability to plan ahead, encouraging the important skill of delaying gratification. Debit cards like Greenlight fortify this concept by marking your kids’ spending, saving and giving money as separate buckets.
You and your kid should decide together how much to allocate for spending and saving. Some financial experts recommend putting a lot of money into spending — as much as 90% — putting only 10% into long-term savings. You’ll want to adjust that percentage to meet the reality of your own kid and family.
For example, a younger child with no bills might allocate more to a savings bucket than an older sibling with more responsibilities. Teens generally need more spending money for everyday items like clothes, eating out and cell phone bills.
How much is right for your kid to save ultimately depends on their responsibilities and spending habits. Fortunately, you can always revisit this conversation when circumstances change.
While piggy banks may be a relic of a bygone time they remain a popular option for young savers with about 1 in 5 (19%) of kids putting their allowances into a physical piggy bank.
GoHenry is now Acorns Early. If you’re looking for a GoHenry alternative, try Greenlight, Step, Current, Modak Makers or Chase First.
Modak has no monthly fee, but it’s slim on features. Greenlight starts at $5.99 but is a value for big families.
Modak is a no-frills, free debit card for kids and teens that comes with a virtual or physical card and the ability to set up direct deposit.
Some of the best free debit cards for kids that don’t charge any monthly fees include Step, Current, Cash App, Axos, Chase, Revolut and more.
Kachinga is a kids’ prepaid card with chores and allowance features, but it comes at a cost.
Step banking accounts help kids and teens learn to manage their money while building their credit scores.
Teach your child financial responsibility with this reloadable debit card that comes equipped with parental controls.
Compare the best kids’ prepaid and debit cards designed for ages 13 and under.
See our first-hand review of the Greenlight card to see if the $5.99 monthly fee makes sense for your family.
Our list of the best credit cards for teens includes Step, Greenlight, Capital One Quicksilver and more. See the full list here.