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How to manage money is a major life skill that children should start acquiring from an early age. But how soon should they get a debit card?
The hardest part of parenting is when your children begin to grow up and become independent human beings. How us parents would love to keep them little and dependent on us for protection. But, as counselling psychologist Keith Polden told us, we’re not raising little kids, we’re raising future adults.
So perhaps it’s time a little someone got a debit card…
Why Your Child Should Have A Debit Card
From a very young age, children begin to grasp that ‘money buys things’. This is evident when your three-year-old begins to start asking you (and sometimes your friends) for money. Whether you’re being intentional about it or not, counselling psychologist Keith Polden says the way we interact with money as adults influences how our children will handle money as adults. But don’t panic just yet. Polden also says:“Like any life skill, if the child doesn’t learn it early on, it doesn’t mean the child will not be able to learn it later.”For a parent’s piece of mind, it is better to let kids begin experimenting with money when they’re still under your roof than when they’re out on their own. If you wait until they’re independent, the impact of their financial mistakes will be much greater. When your child’s debit card is under your watchful eye, you can monitor their decisions and engage with them around responsible spending and saving.
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When Your Child Should Get A Debit Card
Barclays in the UK recommends their children’s bank account for children aged between 11 and 15, some banks in the US have transactional accounts for children as young as nine, while other banks in South Africa only require that the child be under 16/18 years of age. Polden advises that how you introduce the principal of managing money depends on the developmental stage your child is in. Tweens, he explains, can think conceptually, understand cause and effect, and appreciate consequences for behaviour.“For them it might be good to introduce pocket money. Then they have to save to buy things and you teach them the value of money,” says Polden.Laura Levine, chief executive of JumpStart Coalition – a US non-profit educating youth on financial literacy – says children vary in the speed at which they learn to handle money responsibly. She says some children may be ready from age 11 or 12, while others may not be until high school or later. “Generally, however, it is better to let them make mistakes under a parent’s tutelage,” she adds. Levine said it’s also equally important for parents to be ready to devote the time necessary to monitor the account, discuss spending and offer guidance.
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How To Get Your Child A Debit Card
Four of the five major banks in South Africa offer dedicated bank accounts for children. You’ll probably opt to open an account at the bank you’re with to link easily to your own account. But, it’s a good idea to consider how your child will be transacting with the account and consider the features of each bank’s offering. Standard Bank’s (sum)1 account for under 16s, for example, offers your child the Kidz Banking app experience for a “safe, easy and educational introduction to banking”. All of the accounts do not have management fees, but there are varying transactional costs on each. Standard Bank and FNB do not offer any interest that can be accrued but offers separate savings accounts. Depending on where you open the child’s account, you will need:- The child’s birth certificate;
- The parent’s identity document;
- Proof of home address.