Thursday, November 3, 2011

Teaching your kids about spending

When I was fourteen, my grandfather took me to his bank and helped me open my first checking account. At the time, it was rare for a fourteen-year-old to have a checking account of their own but my "Pop" believed it would teach me fiscal responsibility. He wanted to impress upon me the importance of keeping track of what money I earned and how to use it responsibly.  My grandfather learned the hard way that you have to educate children regarding money. When my mother was a freshman in college, he received a very unpleasant phone call from a clothing store. They let him know that my mom had bounced enough checks to endanger an entire rain forest. After making an out-of-state trip to personally cover the expenses, Pop was determined to make sure that I would never be overdrawn.
Years later, I find myself in the position of needing to teach my own children the concept of "only spend what you can afford". Of course, now there are neat things like prepaid Green Dot debit cards that help you teach your kids to spend within their limits. How great is that? You can take their allowance and apply to a prepaid card that they can use for online shopping or just to buy an ice cream cone. The fees are affordable and you can replenish the balance as often or as little as you want.  (Prepaid cards make it so I don’t have to carry cash for on the spot allowance payment. My 9-year-old can get pretty testy when she’s amped up to buy beef jerky! )
Gone are the days when you have to wait for checks to clear before you can be absolutely certain of your balance as well. With a prepaid card like a Greed Dot debit card, I can rest assured that my fourteen-year-old won't be heading to the mall and spending more than I can afford on her latest "I must have this for my wardrobe or die!" moment.  (That leaves more energy for when she starts dating and the constant worrying that comes with that. :)
For more information about prepaid cards, check out Credit Card This site will offer information into fees and help you decide if prepaid cards will help you. Sometimes limits can be a great thing!

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