Opening a kids’ checking account for your child is a step in helping them prepare for their journey toward money independence and responsibility. A kids’ checking account can serve as a learning tool to introduce children to the money basics of spend, save and earn that they’ll use throughout their lives. But is a kids’ checking account a good idea for your child? Let’s learn more about the potential benefits of these accounts.
Teaching money responsibility
Being responsible with money takes practice. By starting early with a checking account for kids, your child may get a head start at developing the skills they need to be responsible with money. Checking accounts for kids provides a sandbox where they can learn money-handling skills firsthand, all under your watchful eye. This way, when it’s time for your child to gain money independence, they’ll already have several years of experience staying on top of their money.
Convenience and accessibility
Many banks offer conveniences which may now extend to kids’ checking accounts too. For example, many kids’ checking accounts come with online and mobile banking, giving kids a firsthand look at how banking works in the digital age.
Can kids have debit cards? Typically, yes. Many kids’ checking accounts come with debit cards, letting your child buy the things they need without carrying cash while providing you with an accurate record of their spending. Keeping debit cards on hand could be especially valuable for teenagers as they start to explore their money independence.
Safety and security
Safety and security are key. A checking account for kids may offer a secure learning environment for your child thanks to carefully designed features aimed at providing robust protection. These include:
- Protection: A checking account for kids might be a safer option for your child’s money than a piggy bank at home. Physical cash could get lost, stolen, or damaged but funds in a kids’ checking account are secured at the bank or in your child’s digital wallet. This may help keep your child’s financial health in check as they’re learning how to stay on top of their money. Kids’ checking accounts at insured banks are also often protected by FDIC insurance.
- Parental controls: A key feature of checking accounts for kids is the array of parental controls available. Parents can typically set spending limits, approve each transaction or even categorize allowable purchases, helping prevent misuse and promoting responsible spending habits.
- Transaction monitoring: Real-time transaction monitoring can be a powerful tool for guiding your child’s learning. By tracking where and how your child is using their money, you can identify patterns, question certain transactions and understand your child’s financial decision-making tendencies.
Encouraging saving and goal setting
The ability to set a target, work towards it and finally reach it isn’t just rewarding — it’s a key financial skill to stay on top of your money. For example, if your child has been eyeing a particular toy or big-ticket item, they could use a checking account for kids to create a savings target. Seeing the goal and watching their savings inch closer with every deposit could prove to be a motivating experience for them, helping them learn vital concepts like delayed gratification and sustainable progress early on.
Preparing for the future
Checking accounts for kids aren’t just about gaining money independence; they’re also about preparing your child for future responsibilities. As they grow up, your child may embark on major financial undertakings, like college tuition or part-time job earnings. Having a kids’ checking account can give them a glimpse of budgeting, saving for major expenses and understanding the value of hard-earned money.
Tips for parents
Fostering money fluency for your child can be as simple as a few basic steps you take on a regular basis. Here are a few potential ways to learn money independence early:
- Involve them in everyday basics: Getting your child used to the ins and outs of handling money can give them a leg up on managing their money later. This could be as simple as inviting your child to participate in simple tasks like comparing prices at the grocery store or looking for sales on common purchases.
- Promote a savings habit: Encouraging your child to set aside a small portion of any money they receive, such as allowances or gifts, can provide an opportunity to practice some of the budgeting skills discussed earlier.
- Talk about money: Sharing your own experiences, successes and even mistakes in managing your money can help demystify the world of finances for your child. This might make them more comfortable discussing money and help them make more informed decisions in the future.
A kids’ checking account is more than a banking tool. It’s an investment in your child’s future, one that might help them grasp important concepts and foster sound money habits sooner. With features to keep their money safer, help them achieve savings goals and monitor their spending, a kids’ checking account might be just what they need to put themselves on the road to successful money independence.