Many Americans have had a point in their lives that they felt like “financial train wrecks” because they didn’t fully understand how money works. After all, swiping a debit card looks far less painless than forking over all those hundred dollar bills. They’d probably tell you that they wish someone had taught them how money worked in a checking account and how to manage it properly. Don’t let that be your teen. Despite growing up without that yourself, you can help your teen have a better relationship with money. Here are a few tips that teens need to know (and that parents should be teaching them) when it comes to teens using debit cards.
Treat the Debit Card like Cash
Teens might not fully understand what it means when they see their parents swiping a debit card over the years. Some may see it as an endless quantity of swiping to make the purchases that they want. This can be dangerous. Parents need to teach them to treat their debit cards like actual cash. Once that card has been swiped, teens should be shown that their money is being deducted from their checking account. Keep a note on their phone that can act as a log. Have them start with their beginning balance. Make sure to deduct their savings, donations, and other expenses. While it’s not their bank account exactly, it will help them be able to track what they’re saving and what they have available to spend. Having it with them at all times on their phones will help keep them accountable too.
Set Them Up with an App and Alerts
Most bank accounts have apps these days that can also give you alerts when money is getting too low in your account. For less worry for parents, teenagers can have their accounts linked to their parents account so both the teenager and parent are receiving alerts on the activity in that account. Set up a routine to help your teens using debit cards to check into their accounts on a daily basis.
Be Aware of Maintenance and Overdraft Fees
This is where many teens using debit cards fall into trouble. A lot of banks require maintenance fees every month for an existing account, while others do not charge fees to teens. Banks can really take advantage of teenagers when they’re not aware of the maintenance and overdraft fees that are happening. Especially if that teenager is not paying close attention to their account. By the time the monthly statement is sent to them, they could have a long list of overdraft fees that can be a major setback. Do a little research before settling on a checking account to find the right perks while avoiding all the fees.
Check Your Account Daily
It’s also a good idea for teenagers to be paying attention to their account at least once a day. This only takes less than a minute with their app and they’re already on their phones anyway. They’ll be better at managing their balance and being more aware of fraudulent activity may be happening in their account. Make this part of their daily routine, just like brushing their teeth and doing homework.
Getting a Prepaid Debit Card Might Be an Option
Do you know that your teenager will run into trouble with a debit card? Some parents have turned to prepaid debit cards to help with this. A set amount of money is put on that debit card and teenagers are not able to go past that. One drawback is that there’s a good chance you also won’t get that money back if the card is stolen.
These are a few tips for teens and parents when it is concerning teens using debit cards on their own. What other things have you done with your teen to help them be a bit more financially responsible?