When is the Right Time to Give Your Kids a Debit Card?

Giving a kid a debit card can be a scary experience. You might worry that the card will be lost or that they will get into trouble with it. Or you might worry they’ll spend too much money and spark a credit score meltdown. Still, you know that it’s important for your child to learn how to manage finances as early as possible, but when is the perfect time to start? Here are a few things to consider before making that decision. 

Preparing your finances to plan for a kid’s debit card

To teach strong financial habits, you’ll need to lead by example. Leading by example can be challenging for parents who have had poor spending habits and are in debt, but it doesn’t need to be if you frame it the right way.

Show your child the consequences of debt and how it affects your family’s finances. Be open about what habits you want them to avoid and show them the better choices. 

While doing this, you should also practice what you preach and get your finances in order so you can learn together. Consider consolidating your debt by searching for the best online personal loans for your situation and keep your child involved in the process so they can learn from your experience.

It may feel embarrassing to put your mistakes out there on display but look at it through the lens of creating a teachable moment that ensures your child will never end up in the same situation.

Why should you give your kid a debit card?

You may be wary of giving your child access to a debit card that’s linked to your checking account or a joint account, but teaching your child about how money works is an excellent investment. Not only will your kid learn about how to balance a checking account and the consequences of impulse spending, but they’ll also feel empowered with a sense of independence to make their own decisions. 

If you want your child to have a positive outlook on money and finances, you’ll need to trust them enough to use money in a controlled environment, like having a debit card that’s linked to a joint account with a small balance.

When is the right time for your kid to get a debit card?

There’s no perfect time for your child to learn personal finance, but there are some milestones that can make it more relevant to their situation.

  • They receive a regular allowance – Instead of paying out cash, transfer the money for their allowance into a joint checking account that’s tied to their debit card. Show them how account balances work and how debits affect the bottom line.
  • They’re about to get their first job – Once they start earning more regular income, consider setting up an additional savings account so that they learn how interest works and the benefit of saving money for emergencies or big purchases.
  • You’re comfortable letting them make mistakes – Strong money management skills require learning about the consequences of overdrafts, impulse spending, and what happens when you don’t keep track of finances. You should monitor their accounts regularly to ensure they don’t get too far into the hole and give them space to solve their own problems and learn the value behind good personal finance habits. 

The bottom line

Watching your child grow up gets difficult as they become more independent and need to learn how to navigate the challenges they’ll face as an adult. But the sooner you take an active approach in teaching them good money management skills, the better off they’ll be when it comes to debt, credit cards, saving for retirement, and becoming a financially responsible adult.