My kids are getting older and The First Bank of Dad is looking for advice and ideas on how they should pay for things.

They are 17, 15, and 13, now. When they go places with friends, I give them a little cash. Son goes out with the swim team, he gets a little cash. Daughter goes to the county fair with friends, she gets a little cash. Other son goes on a field trip, he gets a little cash.

We’re now looking at longer trips where I won’t be there, filling up the tank, running errands, places that don’t take cash, etc. All things I would normally pay for and not expect them to pay for out if their own money in their savings accounts.

Should we open checking accounts with debit cards for each of them and transfer cash in as needed?

How are the fraud protections with debit cards these days? I’ve always avoided using ours for regular purchases because we get fraudulent charges on our credit cards every years.

If I make them authorized users on my credit card, can I limit the amount they can spend?

Cash. When you run out, you can't continue to spend.

I like cash, I don’t like having my kids carrying it around in large quantities.

For example, my daughter is going on a 4 day trip to New York City with one of her school’s clubs. She’ll be paying for her own food, snacks, souvenirs, etc. and I don’t feel comfortable having her walk around with the whole trips worth of cash or leaving some in the hotel room she’ll be sharing with other students.

quote:

Originally posted by 12131:
Cash. When you run out, you can't continue to spend.

exactly, if a place does not do cash then go elsewhere.

Get a prepaid visa at your bank. Put a couple hundred on it for that kind of a trip. Otherwise all cash.
Make sure she understands that keeping it secure and not let anyone see the cc number is very important. It is the same as cash with more concern for theft than cash.

They should get jobs, and use Apple Pay...All the cool kids are doin' that way nowadays!

You can get one of those pre-paid Visa cards, and add funds as you go without compromising a bank account or credit limit if it gets lost.

Dad put me on his Amex when I was 13. There was an understanding that it wasn't a source of spending money but for actual emergencies. I never abused it. That got me my own Visa within a couple years. Again, it was for emergencies or large purchases, like hotel rooms for road trips or prom night. When I started college everybody else was opening their first credit card accounts with $200 limits and I had three platinum cards on my own accounts and about $75k in credit lines.

I had a savings account where my spending money lived. I got a weekly allowance in cash. I put my paychecks in that savings account. I had to cover everything I wanted with allowance, cash from yard work, and paychecks. Bus pass to get to school came from my funds. New clothes? My funds. Snacks after school or lunch instead of brown bagging it? My funds. Entertainment? My funds. I learned how to budget. My best friend called me a miser. He also borrowed money from me every week because he spent his paychecks on stupid shit.

I would do something to help them build credit history. A debit card can only be hit for the money in the account. I've never had an issue getting covered for fraud. A credit card, emergency or for small purchases, builds credit history and teaches responsible use.

Most banks will not immediately refund a hacked bank debit card. Also kids will use the card for everything & banks love the overdraft charges. A credit card with a limit is best. I always use cash at restuarants after being hacked at one in New York City. Also my brother-in-law purchased a $99 camera battery in Manhatten which hit his bank at $999. Cash is king!

The answer depends on your kid. They always worked and have always been on one of our credit cards. Never had a problem. Got their own cards in their Junior Year. Cash is too risky and easily stolen. We had an understanding about limits. We checked the accounts frequently.

I was on the family credit cards as soon as I could drive.

I was told to use it as needed but not be stupid.

I used it until I could get them on my own after college.

I worked for us.

They checked the statement when it came in.

This was long before everything was online.

I already had my own checking/savings accounts around that age. They should each have one with their own money in it. I would also add a debit card IF that specific kid demonstrates the ability to make good choices. And No credit card until you have a job.

My kids are 6 and 9; they each have a cash envelope in the safe. They only get a withdrawal from that Bank of Dad if they reimburse me when we get home. Real accounts will come in a few years.

I am blessed with a very responsible 16 year old son. When he turned 13 we got him a debit card through our credit union on their kid program. He gets an allowance and a little money for mowing. Mostly so he’s not nickel and dimeing me to death.

His card has been hacked once, otherwise he checks his balance on his phone daily and he has never overdrawn.

I give him cash when it is appropriate, but reality is that cash is not always the best option, plus I can track his spending, which I look at multiple times a week.

I am trying to decide the best way to do gas for our vehicles now that he is driving.

A) When they're responsible enough, they need a credit card which can get them out of trouble. (Emergency airfare, hotel, etc - happened to me as a kid - my debit card got flagged and frozen, while traveling.)

B) As long as the kid uses their debit card, as a credit card, it should have the same protections, TMK.

C) I think Apple Pay/Google Pay eliminates a lot of the fraudulent uses.

Also, I use privacy.com for online use.

quote:

Originally posted by Nismo:
You can get one of those pre-paid Visa cards, and add funds as you go without compromising a bank account or credit limit if it gets lost.

This. Reloadable prepaid debit cards are usable more places than cash (notably online purchases), but still allow you to limit the amount of money they have access to like handing them cash, and they're safer since they aren't tied to a bank account or credit account if it gets lost or stolen, plus you can shut them off and recover the lost funds if it gets stolen and you get to it in time.

Some banks offer these types of cards for customers. Otherwise they're available in various stores, as well as directly from card companies like Visa.

Electronic accounts like Apple Pay/Google Pay/Venmo can function similarly, with you preloading in amounts for them, but aren't anywhere near as widely usable as a prepaid card - especially outside of big cities. Lots of retailers out there still aren't set up for electronic payments, or if they are, might only accept one but not others.


Once the 17 year old proves they're responsible and turns 18, you can look into getting a credit card with a low limit, to start building their credit history.

The newer generations NEED to know real cash, and for a time, I’d have them strictly on that. As they get older, a cash app like Apple Pay and the Apple Cash Card will be used heavily until the next greater/better thing comes around.

For those of you who don’t know, there is an Apple Cash Card feature in your iPhone’s Wallet app. You can tie it to your bank account where you can withdraw or deposit money back and forth between the card and your account.

Also, it isn’t a physical card, but a feature. You can easily electronically deposit funds into your child’s Apple Cash Card, and they can pay where ever Apple Pay is accepted. To the child, it is a family debit card.

Personally, I only use the Apple Cash Card to transfer my Apple Pay purchase rewards into my bank account. My 1%, 2%, and 3% purchase rewards go straight to the Cash Card where I could Apple Pay straight from there, but again, I just transfer the money into my savings.

Also, I can text money using this system. Just last night I had HVAC guy come out, and he wanted me to pay electronically. He gave me a telephone number, and I texted his payment to him that way.

Texting money to your child’s Apple Cash Card is an easy feat. I’ll even send a small sum to my adult daughters every now and then just because I can.

quote:

Originally posted by 12131:
Cash. When you run out, you can't continue to spend.

My son was, and still is, a remarkably responsible person, but when he was in high school, we used cash as his method of purchase, mainly as an allowance. There were a few times we got him a $100-200 Visa burner card for school trips and such to supplement his cash. If he spent his allowance, he has to wait until the next one. This taught him to save and budget.

Mrs. slosig and I didn’t do as well as my mom did when I was a kid. Growing up our allowance got larger and larger and we became responsible for more of our needs (back to school, clothes, shoes, etc). It really drove home the idea of budgeting at an early age.

We just got lucky with our kids as they seem to have picked it up by osmosis. They’ve started on cash, then gotten debit & credit cards after hitting 18. Our bank was a huge pain about them getting either before 18.

If you can set them up with either a prepaid credit card or a debit card attached only to a checking account reserved only for that purpose, that would be a great learning tool. If one can learn to use a “credit card” as if it were a “charge card” (Charge what you want up to your limit, but you have to pay it off in full when the bill comes.), that can be immensely helpful.

I can’t remember which of the robber barons it was, can’t find the quote, and I’m probably mangling it, but one of them said something to the effect of, “The difference between rich people and poor people is the direction of the compounding of the interest.”

Prepaid cards might work. I didn’t think about them, but I’ll look into them.

Jobs are of course great ideas, but I’m talking about the things I’d normally pay for. They can get jobs if they want, but my thinking is school is their job. With the time and effort they are putting in, the two oldest will both have Associates Degrees at 17 and they’ll qualify for 4 years of free undergraduate tuition at any Florida public university. Even at $15 an hour, I don’t think a job will be better for them from a financial stand point.

I’d trust the two oldest as authorized users of my cards. If that helps them build credit, that could be a way to go.

The youngest one thinks we need a $225,000 1996 50’ Viking to go fishing. He’s a bit of a dreamer.

quote:

Originally posted by RogueJSK:

Once the 17 year old proves they're responsible and turns 18, you can look into getting a credit card with a low limit, to start building their credit history.

Do this.

When I was in my teens and twenties, I didn't like the idea of credit or owing anyone money. Didn't want a credit card.
Getting closer to 30 I started to see "I may really need this one day", by which point no one would give me a line of credit. And as I'm sure you know how the system works, every time I was denied it made it even harder to get. I eventually had a bank that would issue me a credit card with a $400 limit, if I took out a $400 CD.

Teach them with cash. Credit disconnects them from the pain of actually spending the money. Its why credit card companies make money.