We're going to open up savings accounts for our kids in the next couple of weeks because their birthdays are coming up and they will get some money for their birthdays. They're 7 and 10 (soon to be 8 and 11). Right now the money they've gotten usually gets stashed away in their room (dd stores hers in the toy cash register). I'd like them to get used to using a real bank, and they're old enough now to actually save for real goals (or ds is).
I was doing some banking today and realized that 99.5% of my banking is done either online or with a debit card. I realized that I have no idea how to teach my kids to manage money if they aren't getting a savings book. I'm old enough that I got an actual passbook where the amount was printed on there each time I did a transaction. When I moved to managing my own money, I had a checkbook.
Do my kids get debit cards? Track their accounts online?
What we did (do?) was have a pretend bank at home. I just kept track of the kids' allowance in Excel. They could keep up to $10 in their wallets and I kept the rest. If they needed more, they'd just ask and I'd deduct from their account.
When they turned 10 they got a bank account (both savings and checking) and a debit card. At 12, DD opted to get her allowance yearly instead of monthly and I just wrote her a check for the year. I don't know when DS will start doing that.
We don't actually track the accounts online. DD will start doing that when she turns 14, but she can't get access now. For now, they just don't use the debit cards enough to need to track them that closely.
We did give them extra money when they opened their account. This money is not to spend, but to make sure they don't overdraw their accounts.
DS has both a prepaid debit card and a checking account plus a savings account. He has full online access to all of them. I started with the prepaid account when he was about 7 and he always had some type of savings account. When he turned 10 ish he got the checking acct and full access to monitor all 3. (there really is no difference between the prepaid debit and checking IMO other than the PP Debit is more restrictive on ATM withdrawls and no billpay but honestly he doesn't need billpay) the penalty for bouncing is the same etc.
DS has never overdrawn or bounced a transaction. He knows how to access the accounts, how to transfer money, what the monthly limit for savings transfers is (FDIC limit) and how to do 'deposit at home', since we have an online bank.
DS is 11.
The only issue we've run into is needed some sort of 'ID' when using the debit card, I am usually with him and will hand over my card from the same bank and my ID. This rarely happens since most cashiers don't think DS has an actual bank card but is using some type of gift card ect.
Mom to J and never-ending , 0/2014 items decluttered, 0/52 crafts crafts completed
Seeking zen in 2014. Working on journaling and finding peace this year. Spending my free time taking J to swimteam
We have a similar set-up as Tiredx2. I have an excel spreadsheet that keeps track of the older twos allowance (9-1/2 and almost 7). They are required to divide their allowance into 3 parts (spending, saving and charity) and how they divide it is up to them.
At the end of the year they see the total of their charity column and decide where they would like to donate (unless something comes up before then). At the end of the year I also transfer their "save" money into their bank accounts (this is money they are saving for future schooling, car, etc...) and they don't touch it right now. Their spend money can be spent at any time on whatever they choose. There are some small purchases (toys, candy) that are made here and there but mostly they save their money for bigger purchases. I like how they don't have immediate access to it because they then think a little more about what they are buying. We regularly check the spreadsheet to see how much money they have. Mostly we check before going on a trip because that's when they always ask for extra stuff. That way it's up to them if they want to buy an over-priced souvenir .
I'm not sure what we will do in the next little while with ds1. I haven't really thought about the bank card thing at all. We are starting to require him to spend more of his allowance on his clothing because of his taste/wants. We had picked out a pair of new shoes for spring that fit well but he wanted a more expensive pair so he had to pay the difference. I'll have to watch this thread to see what others do.
Karen - spouse to dh for 11 years, mama to ds (Nov '02), dd (May '05) and ds and dd (Jun '08)
They have some great ledgers at places like Office Max that you could use the same way you would use an old school savings booklet. Some just have the amount, and others go into great detail by separating out everything into categories so you can see how much you spent on what each month. I've personally used one of these as an adult to keep track of my spending, and think it's a great tool.
However, with online banking, if your kids are savvy enough, they can look through their statements online through most banks and see the changes in their account. I think there is something to be said for physically writing it out and figuring out where your money is going though. If you'd like to think of it another way, you can have it be a self-correcting math lesson for them to write out their expenditures and check online to see if they calculated correctly.
SAHM married to DH since 09/11. Mama to DD (01/08)and DS (06/12)
We opened separate high-interest savings accounts for them when they were infants and deposited any gift monies into the accounts as they grew. Those accounts have been untouched other than deposits. When DS turned 18, I gave him a recent account statement on his birthday and told him to do something spectacular with the funds. He's left it and plans to travel after his degree.
When they were pre-teens, we opened separate daily use accounts for them. There they deposited "earned money" - allowances, money from yard sales, and part-time jobs. In the last couple of years, some of their gift money has ended up in those accounts or they have spent it outright. They have had debit card access to those funds and have basically taken care of those accounts on their own for years now (they are 19 and almost-16 now).
When they got to be 11, we started to give them regular pocket money to pay for taking the bus to school, school lunch when they didn't want a lunch from home, and also just walking around money.If they wanted something special, they could save up their pocket money. Cash and piggy banks sem to have taught them e basics of managing money.
They are now 14 and 16. When the elder one was 15, she got her first paying part-time jobs. For her bosses to transfer her money, she needed a bank account with her name only on it. So that was just opened up. Now she is 16, the bank will allow her to have an ATM card; and to do online banking stuff.
DS is 8-1/2 and we use an app called KiddyBank. It automatically divides his allowance each week into three accounts (on my phone only): $4 to spend, $3 to save, and $1 to charity. When savings and charity hit $25, we disburse the funds to his "real" savings account and to a charity of his choice (so far, always cheetah conservation fund). He likes to buy video games, and usually finds they are cheapest on Amazon, so I will buy them and he deducts the money from his account on my phone. Every now and then he wants cash, which I pay him, and he again goes and deducts the amount from my phone.
We started him for three years with real, cash allowance and went to this system about six months ago. It's worked well, and I think gives him the idea of how a debit card works.
Momma to 8 y.o. DS and 5 y.o. DD. Married to a Maker!
WOW I have a 7 year old and he seems so young to be thinking about money! but maybe we should. My friend told me when she was I think high school age, her mom had like a fake checkbook thing she bought--designed to teach about money in the days before everything was on computers--and her allowance worked through that. She had to keep the ledger like it was a real account, couldn't overdraw, had to write checks for cash. Saved the problem of having to have ID to use it in public and the real consequences that go with a bounced check. (Mom may have had some sort of consequence or fee just like a real bank, but in the real world, if the problem gets big enough, someone faces court and jail. Or the adult is the one who pays the bank...and where's the consequence for the kid?)
I still don't trust online. We have an old school check register where I log my debit usage and the occasional actual checks.
lovin DH since 1/04, best mom for my 3 boys 10/04, 11/08, 11/10 one girlie (1/07), one 13 wk (10/13) and 5/15 just your average multigenerational living family!!
Wow you mamas are awesome. We are totally into being financially responsible adults (no debt, IRAs, keeping a safety net, etc) but I TOTALLY have not even thought about starting to pass this on to DD. I'm totally subbing to this thread for ideas for later! She is only 3 and has a fair sized savings account, but I know she'll be more interested in managing her money later in life. And we definitely want to teach her how!
Alicewyf: doula, wife to DH, and mama to Lillian (7/09) and Daniel (6/12).
Maybe I assumed there was an age minimum to get a debit (or use one atthe store). Hmm. I'd like that better than them having cash, I think. They all use the Internet and have access from a mobile device, so they could manage their accounts that way. My kids range in age from 11 down to 5, though, so maybe still a bit too young, yet.
The KiddyBank app sounds awesome. Alas, it looks like it's only for iphones. Those of us with Droids will just have to wait, I guess.
I think at 11 (tomorrow!), ds is definitely ready for a bank account. He's getting a fair amount of money for his birthday, and so I think that we'll open the account this week.
Dd, on the other hand, seems to really like physically having the money. She sits down and counts her coins frequently. (If nothing else, it's good for her math skills.) Right now, she's back in a Harry Potter phase and has decided that the pennies are Knuts, the nickles are Sickles and the quarters/dollar coins are Galleons. So, I'm not sure she's ready for virtual banking.
We opened savings accounts with our oldest kids (10 & 11 at the time) because they had just worked for their dad a lot and had a bunch of money. We use the old-fashioned passbook and they read their statements when they come in the mail. When they want money, we go inside the bank to get it. I think it's important to do this step. As an adult I'm fully aware that and ATM is giving me my own money and it doesn't magically get in the account. I wanted to have the kids have something more "direct". I wanted them to see that they had X dollars and this transaction will leave them Y dollars. Do they want that?
We don't have our kids pay for much. We don't want them to feel like their money is theirs to do with whatever they want.