Mom's, listen up, the best thing I ever did was give my kid a debit card! Your child will learn more from this then you can even imagine. Some kids just see us pull out our credit cards and wala instant merchandise. I wanted to show the process, as a entrepreneur I encouraged my daughter to "take the challenge" and start a "FUN" business over the summer. I took it a step further and gave her a debit card to buy whatever she wanted as long as she was accountable for the money in the account. The debit card was in my name, her possession, kept tight in in her little cupcake wallet in her bag.
I always say start small try a eBay account, be a "kid entrepreneur", no inventory just sell all the "stuff" I paid for. Things that you just don't want, remember Disney, the bracelet made of plastic that cost $16.00 or the stuffed animal found under the bed. We collected, cleaned and assorted.This was a great exercise in cleaning repackaging and making a little money. Giving them a small amounts of money helps them prepare for the day when the numbers will get bigger.
The EBay account was a great lesson in ENTREPRENEURSHIP, writing a thank you note to the customer for there purchase, wrapping putting it in the mailing bag, addressing, bringing it to the post office. Yes it was a little work, but the end result worth it.
Even investing should be learned, I took it a step further, I gave my daughter the debit card. The money in the account came from her eBay account, connected to our bank account, I did give her $50.00 seed money to start. Don't link to your personal account. Every time something sold, CHA CHING it went in her account. The junk around the house soon became valuable merchandise. Translating into sales, sales means more money, more choices, more freedom.
I noticed the the change in attitude and shopping habits immediately, when we went shopping in NYC. The "good" she wanted to purchase was examined, she always asked if it was on sale, valued the purchase more when she used her debit card,vs. when I purchased it. When I would purchased the "ski jacket" for example, she looked at the price tag and realized if she used her card all the money would be gone.
Instant gratification aside, once kids learn they can buy things they want with money they earn and are responsible for- many kids will begin saving every nickel they can get their hands on. How this urge is channeled can determine what kind of financial manager your children will be.
The accountability for money increased too, all cash from Grandparents was immediately deposited. The savings in the bank also increased as the money increased. This was fantastic, when she would go out with her friends, I did not have to worry about making sure she had money, she had her own card, own money. When Christmas rolled around, she did all her own purchases, I added a little and the thought and adhesion of every gift was selected with care and love.
I highly recommend this for parents to take the time out and do. When the bank statement comes in we look at it together, the understanding of how money circulates in the economy was priceless, the responsibility with money earned irreplaceable Teaching children about banking fee's and credit will make them more savvy when they leave the nest.
Mom's its the best $50.00 you will ever invest! I think this will teach kids about choices, accountability, budgeting, and choices. No cash no splash, when the money runs out, no more charging. I also like how at the end of the month you can see where your money was spent. A police officer also said these card are great to be able to track where your kids are. I see no downside.
@cheriecorso We loved the blog. Teaching financial responsibility at a young age is key. Sounds like ur daughter is on the right track!