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« Tips for Making the Most Money when Working Overseas | Main | Free Money Finance March Money Madness, Round 2, Posts 25-28 »

March 09, 2011


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Agree with most.

On when to get the bank accounts going, our local credit union has accounts called Fu$e that is geared for the 16-18 year old. It has an ATM debit card and you can get a low limit credit card if you co-sign ( still thinking on that one) along with a checking. They also have a scholarship associated to the account if you have been a member for 2 years with this account.

When they go to college PNC had the virtual wallet for students that can be linked to the national bank of mom and dad. We will be doing this with my son seeing that the primary ( only ) bank on campus is PNC and also our bank.

College is a good time to get all the bank stuff really going seeing that is when they really need it.

I think junior or senior of high school is a good time to open a checking account for your child, if they don't have one already. This gives him or her a chance to manage an account (with parental guidance) before going to college and living independently.

I opened my checking account when I was 13 years old, of course I grew up on a farm and owned 4 milk cows so I had bills to pay and a steady income.

I'm starting to show my 5 year old how much stuff costs new in a store and that motivates him to wait to find things second hand. We currently did that for a bike of his. Hopefully we'll find a nice used one soon so he gets rewarded for his patience.

Teamwork as a family is so important. I'm glad you mentioned that some chores need to be unpaid.

My son has routine chores that he doesn't get paid for (just like the rest of us do.) He also does "extra" things that I either hate doing or can't do due to allergies, so he gets paid most of the time for doing those. He also has a job. (He's in high school.) All in all I guess we do things pretty similarly.

I had a bank account by the time I was 9 or 10. It was a savings account. I think I got a checking account around 14? Certainly I had one by the time I got my first job at 16. That's when I got my first credit card (in my own name, not linked to my parents).

Boy was the bank manager mad when I went in at 19 to ask about a car loan (we were looking to see if a car loan would be good for my credit history - and decided against it), and he discovered I'd had a credit card for 3 years already. Someone at the bank wasn't supposed to do that...

We do all of that, except we have savings account and a brokerage account for each of our kids instead of a credit union checking account.

A credit union checking account would make sense though too. Perhaps when they are older we'll consider such an option.

We've just opened accounts at ING for our two boys age 9 and 6. It's for the "long term savings" part of their allowance. (Their allowance is also divided into "spending" and "charity".)

I found the typical bank accounts for children disappointing. They were giving them lots of gimmicks for depositing money while the actual interest rate was very low.

I want to teach them about compounding interest but currently even ING's rate doesn't wow them. As my 6 year old said the other day when his Dad pointed out that he had earned some interest: "Twelve cents? That's it?"

I think this advice is pretty good.

I didn't have a checking account till I hit 18, if I recall right. I think I got the first one the summer after high school. Worked fine for me. Otherwise I think high school is a reasonable age to start giving a kid direct access to checking or savings.

My situation is a bit different, my parents are missionaries to Brasil, but they opened savings and checking accounts for us at a fairly young age. They periodically deposited money in the savings account but neither of the accounts really got used until I came to the US for college, four years ago. Got a credit card as well, through the CU at age 16 but it didn't get used till I came tocollege.

For regular allowance and other stuff like that, we used the International Bank of Dad. We each had an account in Quicken where transactions were recorded. I was actually the primary record keeper. I'm not sure if my parents really ever looked at the file.

We were never encouraged to try to find jobs, because jobs are much more scarce in Brasil and my parents wanted to leave them for the people who needed them. For a couple of years, my mom would pay me to cut the small patch of grass we had in front. Other than that, none of our chores were paid.

We each got a monthly allowance of $0.50 * our age, so my monthly allowance maxed out at 9. We children were tight enough with our spending that we each managed to accumulate three to six hundred dollars this way. Most of my few purchases cost more than one months allowance.

My daughters opened checking accounts when they were 16.

But before that, I gave them an annual clothing budget of $400-$600 a year for about two years. I kept the money and paid for their purchases, but I made them track what they spent on clothes. (I buy necessary shoes and coats)

When they opened a checking account, I deposited a lump sum at the start of the year and they have to carefully budget their clothing or spend their own money.

This can work with clothes, gas, entertainment, etc. It's good practice for living on a budget.

I was so proud of my daughter when she curtailed her shopping because she had run out of her clothing budget. When it was her own hard-earned money, she spent less!

I had a savings account from even from the time I was very young. It was through our local bank, and it was designed specifically for kids. No minimums, no fees. My parents names were also on the account, but I was the one who managed the money in it (with my parents help when it came to the ledger). It was a fantastic learning experience about banking and interest.

If your kids are old enough to be working I think they are old enough to have a bank account that you help oversee, especially since you can probably find one without any fees or minimum balances for kids.

For younger kids, I'd consider acting as a "non-traditional" bank- hold the money for your kids, and offer them 10% interest per annum if they keep the money in for over a year. The kids won't get measly cents on their investment; instead, it will allow them to see learn the power of compounding. If you just park your kids' money in the bank, it will probably be worth less on an inflation-adjusted basis then when it was put in, not a great way to encourage investing and delayed gratification.

For older kids, I'd definitely consider a UTMA/UGMA or 529 account (maybe offering a partial match by the parent), or Roth IRA if they have earned income.

I had a savings account since I was 8 or 9. I opened up my 1st checking account at 12 or 13, right before high school started. Got a debit card, over drafted, learned my lesson!

We match FMF on chores; some things you do just because you are part of the family. Our kids (12, 9, 6) are young so don't have any regular paid assignments, but we occasionally have them help with one-time projects and pay for their help there.

Our kids have long-term savings accounts online. We match what they contribute to encourage them to save it long-term. Our approach to earnings has been 20% giving, 20% short-term savings, 20% long-term savings, 20% taxes (family fund used to eat out, watch movies, etc.), and 20% fun money. (We grow slack about this, however.)

We do something similar with chores. There are some that you do because you are part of the family, and others that you can do to earn some extra money. As the kids get older, the chores change but the concept remains the same.

Both kids have savings accounts which I manage at the moment, and I expect that they will get checking accounts in high school so they can learn to use them appropriately BEFORE getting to college.

For regular money, the kids use the MoneyPig banks (though they actually use a cow and a football instead of pigs) which have separate compartments for spending, saving, investing, and donating. To make it easier, we just have the kids divide all their money equally. We match the donating and investing money when it is donated or invested somewhere.

Both kids (4 and 7) get an allowance. It starts at 4 with $1 (because it can easily be divided into 4 equal parts), and we are increasing it by $1 on each birthday. That sounds like a lot as you watch it increase each year, but when you remember half is for investing/donating it leaves them with much less for general spending.

They are learning about planning and budgeting now with this little amount, and learning what happens if you blow it all right before you want to get something at the State Fair! They are also starting to get the idea that you can work to earn extra money for a specific item.

The donating part is very important to both of them as well. They can see a request come out at church, in the mail, or from school and can make their own decisions on funding.

Down the road as the allowance increases we will be looking at switching some expenses we pay for now into their hands and letting them manage clothing budgets, etc in high school. Of course, the timing all depends on the child and how responsible he or she is at that age.

We go the Bank of Mom & Dad route as well and carefully track all transactions in (online) ledgers. I think it's more flexible and convenient than real checking accounts - we open those the summer before college (2 of our 5 are in college now).

We're also implementing Dan Kadlec's excellent "Family 401(k)" with our kids who are earning W2 income from summer jobs:

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