Every parent knows it’s expensive to raise kids. While there’s little anyone can do to lower those costs, a couple of fintech companies are offering parents new options to cope with them. 
One will offer parents cryptocurrency, with its high risk and potentially high rewards, as an investment for their children’s future while another company is launching a cash-back rewards credit card to boost college funds.
UNest focuses on helping parents invest and save for their kids using custodial accounts, which are owned by minors but managed by an adult until the child reaches a certain age. Greenlight’s roots are in helping families manage money and teaching kids about finance with educational materials, debit cards and investing apps. 
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Cryptocurrencies have gotten a lot of bad publicity lately, with many of them shedding more than half their values this year, with fears of greater losses ahead. This sort of volatility was one of the concerns the Department of Labor reiterated after Fidelity Investments said it would soon allow bitcoin as an investment option in its 401(k) plans.
“Extreme volatility can have a devastating impact on participants, especially those approaching retirement and those with substantial allocations to cryptocurrency,” the DOL warned in March. 
But those headlines haven’t dampened consumers’ enthusiasm, and fintechs are responding accordingly. 
“Last year, we did a survey and asked customers of our app what additional products they wanted to see,” said Ksenia Yudina, UNest founder and chief executive. “We asked parents what stocks they wanted to buy right now for the next 10 to 18 years. Most of them said, ‘We don’t want to buy stocks. We want crypto because we see the asset class has the greatest potential for appreciation over a long-term horizon.’”  
If digital assets are held as long-term investments, the volatility will smooth out, Yudina predicted, noting that crypto should only be one, small part of a diversified portfolio. 
Indeed, a T. Rowe Price survey of more than 2,000 parents and their 8- to 14-year-old kids showed that among parents who have money invested in cryptocurrency, 56% say the money is earmarked for a particular goal and 68% hope that gains in cryptocurrency will help make up for savings shortfalls. 
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UNest plans to launch its offering within the next couple of months. So far, it says, it has more than 200,000 people on its waitlist for the new crypto option. 
“This is exciting news because if you invest in it for the long term, it has the best potential for appreciation,” said Ric Edelman, founder of Digital Assets Council of Financial Professionals and author of a new book “The Truth About Crypto“. “This is an opportunity for parents to engage in an investment strategy that children are already keen on. This is native to them. They speak ‘digital’ and understand this far better than their parents.” 
If you don’t happen to be fluent in “digital,” you’re still in luck. Greenlight speaks your language. 
It’s true that 529 college savings credit cards are an easy, convenient way to supplement your college fund, but they probably can’t fully fund the tuition.
It plans to launch in July a Family Cash Mastercard, its first-ever credit card for parents that will offer up to 3% unlimited cash back on all purchases with the option to automatically invest rewards in a standard brokerage account for their kids’ college fund. Money that goes into the account can be invested in stocks or ETFs of your choice via the Greenlight investing platform. The credit card carries no additional fees, and Greenlight customers can sign up online to get on the waitlist for one. 
A survey by Greenlight found that only 22% of parents use credit card rewards for long-term saving despite 90% saying they wish they had more money saved for their children’s future. Some 68% of parents said they have little to no savings for their children’s future. 
“We wanted to help solve that problem, but not say something unrealistic like ‘set aside more money and contribute that to a college fund’ because most families don’t have that extra money,” said Tim Sheehan, Greenlight CEO. “We wanted to work with families’ existing actions and current lives.” 
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Sheehan, who has children of his own, said he understands how busy parents are. So, he said it was important to him to make saving “automagically work,” meaning parents could set up where the cash back rewards would go each month and not have to think about it again.  
Giving parents control and flexibility over that cash back money was also important.  
“So many things can pop up that we don’t know ahead of time – a health issue or other need with school or any number of things – and you may need the money,” he said. “We wanted to make sure parents could access the money if needed. That’s why it’s not a 529 account and parents wouldn’t be penalized if they withdrew the money because they needed it.”  
A 529 account is a tax-advantaged savings account for education expenses. Any withdrawals used for non-education expenses can face stiff penalties.
Medora Lee is a money, markets, and personal finance reporter at USA Today TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.


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