quote:

Originally posted by Aeteocles:
Skip the debit card.

Honestly, the card is gonna get hacked and debit cards are just an added hassle.

Instead, get a *secured* credit card. You put $500 into the bank, then they issue you a card with a $500 limit.

I recommend this because you at building a credit history with a credit card. Starting sooner, rather than later is better.

Absolutely. For chrissakes, forget the debit card. Just add him or her as a user to your credit card account and set limits. I just can't fathom why anyone would use a debit card nowadays when a credit card is an option. Makes no sense.

quote:

Originally posted by Balzé Halzé:

quote:

Originally posted by Aeteocles:
Skip the debit card.

Honestly, the card is gonna get hacked and debit cards are just an added hassle.

Instead, get a *secured* credit card. You put $500 into the bank, then they issue you a card with a $500 limit.

I recommend this because you at building a credit history with a credit card. Starting sooner, rather than later is better.

Absolutely. For chrissakes, forget the debit card. Just add him or her as a user to your credit card account and set limits. I just can't fathom why anyone would use a debit card nowadays when a credit card is an option. Makes no sense.

It makes sense for people who lack the disciple to use a credit card as a charge card (pay it all off at the end of the month, don’t spend it if you don’t have it) and know their limitation.

Sure, for the rest of us, it makes no sense, but we are not everybody.

quote:

Originally posted by Balzé Halzé:

quote:

Originally posted by Aeteocles:
Skip the debit card.

Honestly, the card is gonna get hacked and debit cards are just an added hassle.

Instead, get a *secured* credit card. You put $500 into the bank, then they issue you a card with a $500 limit.

I recommend this because you at building a credit history with a credit card. Starting sooner, rather than later is better.

Absolutely. For chrissakes, forget the debit card. Just add him or her as a user to your credit card account and set limits. I just can't fathom why anyone would use a debit card nowadays when a credit card is an option. Makes no sense.

I guess my mistake was saying they are young teens. They are 13 and 14. I am not giving them a credit card. I want them to learn to earn money not have credit.

My son cuts my grass every week for $15 I do not always have cash on hand. He gets an allowance for chores, and we owe him like $25.


I set up greenlight and paid him from my chair watching college football.

quote:

Originally posted by GA Gator:
I want them to learn to earn money not have credit.

The foundation for a prosperous future.

quote:

Originally posted by braillediver:

quote:

Originally posted by GA Gator:
I want them to learn to earn money not have credit.

The foundation for a prosperous future.

I respectfully disagree. I don't have kids, but I've already put much thought into how I plan on raising my kids and the skills that I need to teach them. Maybe my perspective might be helpful to others out there.

I believe that teaching children or even young adults to save is not enough. Financial success over the long term is much more complicated than "save good, spend bad." Given a long enough time line, you could save yourself to prosperity--but it's a long road wrought with many dangers.

One of those dangers is the availability of credit. It's out there. You can't ignore it and we can't put that rabbit back in the hat. My perspective is that kids would be better equipped in life if they developed good habits concerning the use of credit early on (spend only what you have, pay it down every month, groom your credit history and credit blend, manage your debt-to-credit ratio, etc). This would be better than teaching them to save, then having them turn to credit much later down the road (in their 20's or 30's) without good habits already built. You can hope that they learn to save for every contingency and that they never turn to credit, or you can train them early on to not misuse credit.

Personally, I would create separate savings and checking accounts. Either actually at the bank, or on the books with the "Bank of Mom and Dad".
I would also get them a secured credit card that is backed by money they actually have. Make them use their credit cards, and make them pay it off each month. Get them to manage money in the abstract--yes, it's easier for a kid to stop spending when they physically run out of money, but if your kid can learn to stop spending money when he or she hits a mental threshold, he or she will be ahead of the game.

Lastly, most people's financial literacy is pretty poor. Ask the average person about how much thought they've put into their investment strategies, and they give you a blank look. Teaching your kid to put his money into a checking account is nice. But that's some pretty basic stuff that's not really preparing them for the real world. If you want to do them some favors, then teach them some legit higher level strategies. Here are a few:

First, make your kids calculate and withhold their own taxes on income. Paying them $15? Have them calculate their 33% withholding and only give them $10. Hold the other $5 and teach them that in real life, the "man" is going to keep a part of your money.

Corollary to step one: if you can teach them that the money they spend to create income will be spent with pre-tax dollars or can be deductible at the end of the year, even better. You can teach them about tax preferential accounts by holding their money towards a big goal (college) and paying them bonuses if they leave it there until a withdrawal age, or charging them a penalty if they withdraw early.

Second, teach your kids the power of compounding interest for savings. Let them leave the money with the "Bank of Mom and Dad" that pays interest. Show them that if they leave the money with you, rather than moving it to their "checking" account, that they'll get more money at the end of the year.

Third, get them investing. You can actually let them invest in real companies by buying stocks on their behalf, or you can "pretend" and just hold the money and pay them dividends and gains.

I plan on starting my kids early with monopoly money that they can save, earn interest, and spend towards their toys. In fact, I plan on using an economy system so that the kids will have to rent their toys for playtime.

Parenting is a marathon not a sprint. I can't teach credit without teaching savings and debt first. I want my kids to learn to earn money and pay bills before they get credit. My kids are years before they can get a job. Right now school is their job, they get "paid" for good performance in school. Five to ten dollars a week for doing homework and getting good grades. Skipping homework and failing tests they dont get "paid".

quote:

Originally posted by airbubba:
add an account where you bank, create a pin & you both have a card/access + you can transfer electronically.

No need to complicate it to that degree.

Check with your bank for a prepaid debit card. No additional account(s) required. Just take the card and load whatever funds you want to it. When it's depleted, you simply add more cash to it. Just make sure you and your kids realize the card is the same as cash if lost. Also watch out for fees associated with these cards. If your bank does not have one available, check out this link for more options. https://www.nerdwallet.com/blo...prepaid-debit-cards/.