Kids should learn about finances, which gives you something else to teach your children. One great way to do this is through a debit card or a prepaid credit card. That way you can limit spending and your children can learn valuable lessons about money management in the process.
Here is how it is done:
Well, a prepaid credit or debit card is exactly what it sounds like. It is a prepaid card that you just deposit a certain amount of money on and use. You can deposit $100 and your child will not be able to spend more than that amount. If they do spend it all, then they cant do anything else until its time for more money to be placed on the card.
What you are teaching your children is that once their money is gone, it is gone. They wont like this, so this makes it more likely that they wont experience this as adults. When all of the money is spent, it is a matter of waiting until the next payday. Kids need to learn this so that they are not amongst the over 70% of individuals living paycheck to paycheck as adults.
You can also encourage your child to save their money by telling them not to spend everything on their card. They can save up the money to do things that they want to do. For instance, they may want to go to the beach with a friend. If so, make them pay for it on their own with their money.
What you are doing here is teaching them how to manage and save money. The wise way to do this is by depositing your childs allowance rather than giving them money. When a child works for their money they value it more. When they receive such things as birthday money or money for another occasion, deposit the money onto the card.
In the meantime, keeping track of transactions also becomes a part of the curriculum. Your child can learn to track transactions online, keep a register, and consider purchases before making them. This will keep the child from becoming embarrassed in the checkout line when there is no more money on the card. You dont want your child to experience this embarrassment, so make sure transaction tracking is part of the deal.
So when you are looking for a great tool that will teach your child about spending and saving money, a debit card is a great tool. Just make sure that the card you get is a prepaid credit card or debit card so that you dont have to worry about your child getting carried away.
