Is it time to teach your child about money? Is he or she ready to have a real allowance, ready to get his/her first part time job, or does your child already have a little income from babysitting, yard mowing, or something else? Have you ever given your child your debit or credit card to buy something online? If you’ve answered yes to any of these questions, and you haven’t already done so, it’s time to teach your child how to save, budget, and spend wisely!
These days, you would be amazed at how many young adults have absolutely no idea how to handle money. They don’t have checking accounts, don’t have savings accounts, and forget giving them a credit or debit card, because it would be maxed out or overdrawn in no time.
Don’t let your child be one of those young people – there is an easy way to teach your child how to handle money in today’s financial world.
While you can take your child to the bank and help him/her to open a conventional savings account (or even a checking account), it’s probably not going to be the easiest way to teach your child how to handle money – for example, unless you’re willing to hand him/her a debit card to carry around, they won’t have access to the money in the account except during normal banking business hours, and that’s not always convenient for you! Secondly, since you will have to sign on the account, if he or she overdraws the account, the bank can withdraw that money from YOUR bank account, even if it’s a separate account (it’s true, read the fine print).
So, without inconveniencing yourself or risking your own finances, what is the easiest way to teach your child about money?
Get a prepaid / debit card! That’s right – sign up for a prepaid / debit card in your name, and then set your child up as an additional cardholder on the account. That way, he or she will have an account that can be set up, accessed via an online interface that looks remarkably like a bank account, and the card can be reloaded as needed, without a significant risk to your own finances. He or she can load the card with that babysitting money, that lawn mowing money, or you can just put his/her allowance on the card, and the money is available when they need it.
No carrying cash. No trips to the bank. No “losing” his/her lunch money, book fee money, or allowance. And best of all, no overspending! After all – with prepaid cards, you can’t usually spend more than you have available on the card, and they’re great for shopping online (or downloading music, or buying tokens for online games, or whatever else kids do online these days).
So go ahead, start your young adult on his/her way financially!