Checking account lessons for your little ones.
Teaching your child how to handle money is a vital life lesson. The earlier you start their financial education, the more knowledgeable and responsible they’ll be with money. Opening a checking account for your child is an excellent way to impart real-world money management skills.
Programs for Kids
Accounts and programs designed specifically for children typically mirror features of traditional checking accounts but offer important oversight. Accounts with parental controls allow you to monitor your child’s spending by sending text alerts or setting limits for ATM, debit card transactions, and withdrawals. These controls provide you the ability to intervene when necessary.
Joint Account Options
If your financial institution doesn’t offer accounts with parental controls and you don’t want to switch banks, consider adding your name as a joint account holder. As a joint account holder, you’ll have full access to and visibility of your child’s account.
Financial Goals
Once you've selected the right account for your child, it's time to set financial goals. First, determine how you want your child to use the account, advises Forbes contributor Ben Gran. Should they deposit a certain percentage of their allowance each month? Are they saving for a specific goal, such as a bike or a computer? Or are they responsible for covering expenses like their cell phone bill?
Checking Account Logistics
Though writing checks is less common today, it's still a valuable skill for your child to learn. Show them how to fill out a check and record the transaction in their account register. If your child receives a check as a gift or from employment, guide them through the endorsement, deposit slip, and transaction process at the bank.
Online banking will likely be part of your child’s checking account. Assist them in setting up an online profile, selecting a secure password and exploring all available features. Teach your child how to read their banking statement and highlight the importance of avoiding overdrafts. If you’re allowing ATM access, demonstrate how to complete transactions, set withdrawal limits, and safely use the machine.
A checking account gives your child an active role in managing their financial future. It provides a secure way for them to save money while also teaching the balance between saving and spending. Whether you’re a joint account holder or have set up parental controls, you can continue guiding them in financial lessons as they grow.
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