Bank account for my son

[Marsupialmom]

My son wants money and a bank account for Christmas gift.  He is 16, wants a debit card, and a place to get pay checks direct deposited.  

I mention this to a friend and they said one of us parents need to be on the account.  Our bank, at this age, does not require it. 

Am I wrong not wanting to be on his account.  He needs to learn this.  

Would you be on your 16 year olds "own" bank account? 

[Alyantavid]

Yes I would be.  My parents were on mine until I was married.  I think it's always a good idea to have someone else be able to access an account.  I'd make sure he's aware that this is his deal, your name is only there for emergencies though.

[enkmom]

I wouldn't if I didn't have to.  In my opinion, if a child is old enough to have a job he is entitled to handle his own finances.  I explained to mine exactly how accounts worked, what the fees were, all the benefits and hazards and then they set up and managed their own accounts.

[Storm Bride]

It depends how things are set up.

I set up ds1's account when he was about 12. We actually did it so that I could directly deposit his allowance, because I rarely had the cash. His account is only in his name, but since he was so young, I had it tied to my debit card. That means that I have online access to it, and can transfer money between it and my other accounts. I do so, sometimes. He still gets an allowance (until he graduates), so I transfer money in. I also paid for something on my Visa recently, and then took his share and transferred it. I do these things, because he doesn't have access to my accounts, so he can't.

It works for us. It simplifies things when I can easily do transfers online, but he otherwise handles his own account. His paycheques are direct deposited, and he handles all his own money himself. IMO, it's the best of both worlds...but I don't know if all accounts can be set up that way.

I also had my mom on my savings account for years, even after I got married. I needed her signature to pull any money out, which made me much less likely to do so on a whim. I never regretted it. My savings were/are pretty piddly, but when I think back on my financial situation during those years, it seems like a minor miracle that I saved anything. (I'm also pretty sure if my mom's name hadn't been on it, my ex would have found some way to get his hands on it.)

[redvlagrl]

At 16, no way would I be on his account. If he has his own money he should be able to spend it on anything he wants without you being able to check.

If you give him an allowance you can transfer money into his account without being on it.

if it is just a debit card then there is no worry of him racking up a debt.

I think he will appreciate the autonomy it will give him and if he wastes the money of stupid things, then he will learn not to do that!

[CarrieMF]

I was 12/13 when I got my own checking account. I have no idea if my parents were on it or not, I doubt it. However it was a really small town & Mom would ask the tellers & the tellers would tell her activity. The tellers were my aunt, 1 good neighbor & 1 other neighbor.  Really small town, the rules are different.  Plus the bank statements would come to the house & mom would open those too.

Now my 12yo just got a checking account.  I am on the account, BUT only so I can transfer money into her account online.  It was the only way it could be done. If it wasn't for that I wouldn't be on it.  We never have cash so I find it hard to give allowance or $ for shovelling snow/mowing lawn.  I told her if she babysits(gets paid in cash) I could transfer that $ into her account & she could give us the cash.  I won't always do it as I'll teach her how to do deposits & such, but we do not get to the bank very often(1-2 times a month)

[34me]

We bank at a very small credit union and my kids have had accounts since they were 5, 7 and 9.  I am on the accounts due to the age they got them and so that I can transfer money around since they have some CDs.  Also because we bank at a CU, there is only 1 branch in our city of over 100,000 so this way I can get money out for them if they want - they don't have debit cards at 12,14 and 16.  If my 16yo would ever get a job, she would get one.

[Storm Bride]

Originally Posted by redvlagrl 
If you give him an allowance you can transfer money into his account without being on it.

How does that work?

[cschick]

Originally Posted by Storm Bride 

Originally Posted by redvlagrl 
If you give him an allowance you can transfer money into his account without being on it.

How does that work?

Call up the bank and have them do an EFT from your account to theirs. My parents were never/have never been on any of my accounts, but they were always able to do this. (1990s) Primarily they did it so that I could go and pay tuition at college.

I don't know if you could do something like this online nowadays, and (over the phone) it may only be possible if both you and the child have an account at the same bank. The other thing you used to be able to do was a physical, old-fashioned deposit to basically any account you had the account number for (at any banks). Drop the deposit slip and check into the deposit box.

[CarrieMF]

Originally Posted by cschick 

Originally Posted by Storm Bride 

Originally Posted by redvlagrl 
If you give him an allowance you can transfer money into his account without being on it.

How does that work?

Call up the bank and have them do an EFT from your account to theirs. My parents were never/have never been on any of my accounts, but they were always able to do this. (1990s) Primarily they did it so that I could go and pay tuition at college.

I don't know if you could do something like this online nowadays, and (over the phone) it may only be possible if both you and the child have an account at the same bank. The other thing you used to be able to do was a physical, old-fashioned deposit to basically any account you had the account number for (at any banks). Drop the deposit slip and check into the deposit box.

At our CU we can only transfer from account to account online IF we are a joint account holder.    It'd be a PITA to call them for every $2-$5 for small things, yk. 

[TiredX2]

DD got a savings & checking account at 10 as well as a debit card.  We actually chose a Credit Union that she could have her own account at.  We gave her $500 that was not to be spent but was to provide the cushion of her savings/checking until she is basically... an adult.  We didn't want her to have to deal with overdraft fees.  It has worked well and we will do the same with DS when he turns 10.  This year she opted to take her entire yearly allowance ($300) in a one time payment so she could work on budgeting more.  DS still just gets $10/month.

[CarrieMF]

 This year she opted to take her entire yearly allowance ($300) in a one time payment so she could work on budgeting more

intriging idea. It would solve the whole "never having cash on  hand" problem. 

[TiredX2]

Quote:

Originally Posted by CarrieMF 

 This year she opted to take her entire yearly allowance ($300) in a one time payment so she could work on budgeting more

intriging idea. It would solve the whole "never having cash on  hand" problem. 

I figure she'll either do well, or run out of money months in advance and hopefully choose to never do that again in her life.  Either way, a learning situation.  Hopefully, we'll be able to add money to her allowance as well as purchasing responsabilities each year.
 

[GirlBoyGirl]

I had my own at 16. I don't see what is wrong with that! If you want, you could have access to his online banking information so you can keep an eye on it. I do think he needs to learn. Just make sure to get an account that has ZERO chance of him overdrafting (so his card would get declined if he didn't have the money). Not saying he would try to do it on purpose but he could mistakenly think he has money and then overdraft his account.

[gumshoegirl007]

I think there's a difference between having a joint account with your kid, and giving your kid their "own" account that your name is on.  For administrative purposes, there isn't a difference from the bank's perspective, but there can be from the way you operationalize it.

Confession time.  I'm a 32 year old married woman with two kids and my mother is still joint on one of my accounts.  This is my account (my personal spending one), but her name is on it.  Why?  This one account was set up when I was a child and when I moved away for university, it was just easier for her to be able to transfer me money or for me to pay her back.  For example, last week I wanted to purchase a gift certificate for my grandmother's Christmas present at her local mani/pedi place.  I live 5 hours away from my family so it wasn't possible for me to pop in and purchase it myself.  My mom did it for me and I told her to take the $40 bucks from my account.  Much simpler than sending a cheque.

In the 20+ years she's been on my account, she never once touched my money or commented on how I spent it.  It was always a matter of convenience for us.  In reality, I never did take her off because the bank changed the rules and you have to close down an account that is joint, you can't just remove one person and keep the same account open with the same number.  We have that level of trust and the alternative was just a pain in the butt.

Being on your son's account, or not being on there, isn't going to help him learn.  It's all that other work you do with him :)

[RooRooDog]

I'm "all grown up", a parent myself, and my name and parents' names are together on both my and their accounts started when I was younger.  It was explained to me that having two names on an account:  if something happens to one- incapacitation, death, etc. the other can access the money without attorneys, taxes, probate, etc.  On a lighter note, it was also really convenient to transfer money back and forth.  FWIW my parents never took any of my money, and I never took any of theirs.

[heatherdeg]

I think the real question is how much financial education the 16yo has.  If it were my kid, I probably wouldn't give it a second thought because he started handling his own money at 5yo.  So by the time he's 16yo, I would know that he had several years of managing his own money, being responsible for specific things that he has to pay for, etc. and having to keep track of how much money is in each of his accounts (his allowance is split into 5 "accounts").  Worthy of note is that he is about to turn 7yo, not 15 or 16yo.    When he turns 7yo in January, we will be opening a bank account for his savings component of his allowance.  When he understands how to use a debit card, and can conceptually make the leap from the cash in the 5 category wallets he has now to a paper tracking system for money in an account, we will give him a debit card and just transfer his allowance into his account and decide what kind of oversight we need based on how he is learning about his money.

I think you need to look at the same things with your own son.  How much do you think he knows about handling his money?  How much oversight do you think he needs?  How open would he be to working with you each week to go over his finances until you know he really "gets" it (in terms of tracking and thinking about his actions--notsomuch what his actions are and if you think they're okay).

People can say "He's 16 and old enough to have a job, so..." but having taught high school business electives with one of my classes restricted to juniors and seniors.  THEY STILL NEED HELP!!  It kind of shocked me at first how much they DIDN'T know and needed help... and often were willing to take help framed in a way that they could be sure that they could make their own decisions and you would just be a facilitator of their learning how to navigate it all as opposed to being a dictator of what to do--ya know?  And given the lessons we need kids to learn about money, I think this is a place to err on the side of not putting him in the position of learning the hardest way.

You know your kid better than any of us.  You know how meticulous he is or isn't, how much money burns a hole in his pocket or doesn't, what kind of goals he has or hasn't that would drive his money management, etc.

Originally Posted by GirlBoyGirl 

I had my own at 16. I don't see what is wrong with that! If you want, you could have access to his online banking information so you can keep an eye on it. I do think he needs to learn. Just make sure to get an account that has ZERO chance of him overdrafting (so his card would get declined if he didn't have the money). Not saying he would try to do it on purpose but he could mistakenly think he has money and then overdraft his account.

I totally agree with this, too.  Overdraft fees could really put ANYone in a huge hole.  Not exactly fair for someone just trying to learn to manage their accounts.  :/

[Denvergirlie]

I got my first bank account when I was 14. My mom was on my bank account until I was 25 or so. But her purse was stolen and when she alerted the bank, they also placed a hold on my account as well. That totally stunk, as I thus then bounced a bunch of checks. Got it figured out, the bank took away the fees on my account and wrote me a nice letter to the people a bounced checks with.

It worked out okay, but something to keep in mind.

That being said, I still ended up in a lot of debt. My parents taught a fine lesson about managing actual money, but basically no education about debt. I knew debt was "bad" but never got an explaination on why debt was bad and how it can/ could rob you of choices in the future and add a lot of stress to one's life. I'm debt free now, but it was a hard lesson I had to learn by myself.

So in addition to teaching about actual money management, i would encourage some lessons about debt as well.

[enkmom]

I am one of the posters who said "having a job means he's old enough to manage his own money", and I never meant to imply that I didn't give my children plenty of financial education.  They were perfectly aware of all the ins and outs and the what if's.  My 21 year old has never had an overdraft and manages her account meticulously.  My 20 year old got a $75 overdraft charge for debiting an 89cent soda at McDonald's when his account dipped too low.  Now he manages his account meticulously, too.

The ONLY time that being on his account would have been helpful was when he was 17 and on a school trip to Spain.  Even though he notified Bank of America that he would be leaving the country, and they made note of it, his account was frozen until he called them to verify that he was indeed in Spain.  They couldn't talk to me because I was not on his account.  This is not a circumstance that is likely to recur, so I don't worry about it anymore.  He also switched to a local bank when he got home!

 I easily deposit money in his account every month for his college living expenses.  He leaves me deposit tickets, and I write a check and deposit it in his account on payday while I am at the bank anyway.

[Annie Mac]

One thing to consider is that, with a joint account, if your son does make an "oopsie," you are just as much responsible for it as he is. Your bank may well be able to scoop the money from your single name account to cover the debit in the account that is joint with your son. Overdrafts can be caused by things that are pretty much out of your son's control; all it takes is one bad cheque to seriously mess someone up (I mean receiving a bad cheque, not writing one).