'I Gave My 14-Year-Old a Debit Card (and, No, I'm Not Crazy)'

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How to Teach Your Teen to Manage Money

By Deborah Dunham

In our Money Mic series, we hand over the podium to people with controversial views about money. These are their views, not ours, but we welcome your responses. Today, one woman shares what happened when she handed over a cash-loaded debit card to her teenage son. You heard right.

Just the thought of giving a 14-year-old a debit card can give a parent nightmares.

Sure, financial freedom may sound appealing to a teenager, but as the mother of two teens myself, I know there is no way my kids can experience financial freedom unless that freedom comes with a lot of my money. And that has little appeal -- for me, anyway.

But I also know how important it is to teach kids about money management early on in life. As in, well before they head off to college.

That's why I decided to let my 14-year-old son, John*, test out a debit card designed just for teens.

Specifically, it's "a reloadable prepaid card that gives your teen the freedom to purchase items online, in stores, and wherever Visa debit cards are accepted. It also gives parents (like you) the reassurance that comes from setting boundaries around your teen's spending limits."

In other words, parents ("the account owner") can transfer money into the bank account tied to the card, and then teens ("the cardholder") can use it for spending.

In addition to being able to monitor your kid's usage online, parents can get "real time" notifications via e-mail or text about their teen's spending activity.

It's just one of several such cards that financial institutions have been rolling out in recent years, and I was willing to give it a "real time" try -- knowing full well that I was either being a financially savvy parent or a foolish one.

To $2 from $50 -- Adventures in Debit Card Accountability

Let's just say that John was more than a little excited to finally get his own debit card.

He doesn't receive an allowance, so his spending money comes from birthday and Christmas gifts, as well as what he earns doing odd jobs around the neighborhood, like sweeping driveways and pet sitting.

For a 14-year-old kid, these things have actually turned into a tidy little income.

So my idea was that the debit card would be an easy way to manage -- and spend -- most of that money. And, truth be told, it was also a way to help my son feel less like a kid and more like a young adult.

Well, after initially putting $50 on the card for him that first week, I found out almost immediately that I should have discussed some parameters up front.

The feature I like most is getting an e-mail alert about his every purchase -- which is how I discovered that his first outing with the card was to buy candy at a gas station.

"Um, that's not happening again," I told him after seeing the expense.

"Why not? It's my money," he replied.

After I reminded him that it was actually my money, he reluctantly agreed not to spend any more of it on candy.

My annoyance aside, the moment actually created a good opportunity to sit down and discuss just where he could spend his newfound cash.

%VIRTUAL-pullquote-John has typically been more of a saver than a spender, so it was interesting to watch his habits change while using this card -- he'd have happily spent all $50 in one day.%So together we came up with a list of suitable restaurants, clothing stores and entertainment spots -- like the local movie theater and putt-putt golf course.

John has typically been more of a saver than a spender, so it was interesting to watch his habits change while using this card -- he would have happily spent all $50 in one day.

But I told him that he only had one week to use the card, so he had to make that money last. If all went well, we would then negotiate whether he could continue to use the debit card.

When the week was up, he was down to $2.35, and was more than eager for me to "just put another $50" on it so he could continue his "wealthy" state, as he put it.

Instead, I said, "I will match anything that you put on your card, up to $25 a week."

The underlying message: He better get busy knocking on some doors around the neighborhood to see who had leaves to rake and lizards to pet-sit. (He has a job taking care of a friend's iguana -- seriously.)

The other part of the deal required him to deposit some of his earned money into his savings account -- something he's always been good about.

However, I could see that his interest in saving was already shifting by having the freedom of a debit card, so I wanted to ensure that he realized the importance of continuing to put some of his earnings aside.

Lessons Learned in a Cashless Economy

In some ways I wish kids would learn about money the way I did: by painfully counting out dollar bills at the cash register, hoping I had enough for those new jeans.

I believe having cash on hand is a good way to learn about the value of money -- and it doesn't allow us to exceed our spending limits.

But reality calls and that means plastic is taking over, so I am opting to teach my son about fiscal responsibility with debit -- and hopefully not credit -- cards.

I do worry though that kids who grow up with only plastic in their pockets won't learn the true value of a dollar, and will possibly take advantage of their spending power. Hello, average American credit card debt of nearly $16,000.

But for now I'm OK with my son having a debit card I can monitor. Knowing that his spending powers are limited gives me peace of mind -- and hopefully the time I need to teach him more important real-life money lessons.

Plus, to be honest, I rarely have cash on me these days, relying almost exclusively on debit cards. So I should preach what I practice, right?

*Names have been changed.
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