Debit Cards for Older Children?

Most parents are hesitant to talk to their kids about money at a young age, fearing that their kids might become a little too attached to it. It may also entail the parents admitting their own shortcomings when it comes to handling money. However, it is never too early to start kids on financial smarts. Learning how to manage money is a vital skill that kids should learn.

It is easy enough to start you children on the path to smart money management. Start by sharing with them in simple terms, how money works for your family. Explaining where money comes from and how you use it can give them an understanding why it is not something to waste. You can give them a taste of how to handle money firsthand by giving them allowance when they are old enough. Start by giving them small amounts of cash. Teach them the value of balancing a budget and saving money for something they want to buy. You can also start the children on their own savings account and building their own small fortune.

Banks offer debit cards along with the saving accounts. Recently, debit cards have also been offered with children’s saving accounts, targeting adolescents and teenagers. Whether or not debit cards are a good idea for older kids is answerable only by how the children handle such responsibility. One child may be able to handle his finances just fine, while the other might be overwhelmed and go on a spending spree.

Learning How To Use A Card

Giving your child the chance to learn how debit cards work is a good way to teach them money management. These days, paying through a card has become the best way to purchase items. It allows payment of the exact amount, leaving you less chances of incorrect change. Card payment is rapidly becoming the best way to purchase items, and it may not be too long before cashless transactions become the norm.

Advantages Of A Debit Card

Giving your child a debit card provides several advantages.

• You can transfer allowance to his account from yours over the bank’s online facility. This is convenient for you because you can handle all your funds in one sitting, and it also provides you a transaction record that the transfer has taken place.
• You child can keep track of his expenses in a similar manner. By using a debit card to pay for his expenses, he is able to see where his money goes.
• Debit cards can only be used with a PIN code. If your child loses his card, you can be sure that the money is safe. If a child is carrying cash and it gets stolen, the money can be spent immediately and you cannot get it back.
• Using a debit card gives the children a sense of responsibility. They know that they can only spend what amount is on the card, therefore they will learn to balance it until their next allowance comes in.

Pitfalls And Problems

Like other things, there are still certain disadvantages with debit cards. It also creates situations that may get children into financial trouble if they and their parents are not careful. The main problem could stem from the fact that since there is no psychological link with real cash, children may not see debit card as money at all. With this outlook, children may be tempted to use up all the money, rather than budget it appropriately as most people do with cash.

Supervision and proper education from the parents can help overcome this. Children will have to learn how to manage their finances sooner or later, and introducing them to the benefits of card transactions can help start them off. Bottom line is, card transaction or not, children need to get the feel of handling money for themselves in order to understand how it really works.