How Debit Cards for Kids Can Help Build Money Management Skills

We all want our kids to develop good money management skills to set them up for success. Managing money is one of the most important life skills, and oftentimes, it can be something that seems daunting. One way to jumpstart the process to help your children begin practicing managing money is by getting your kids a debit card. A debit card can be an important tool to teach skills like budgeting, saving, and responsible spending habits. It can be an opportunity for your kids to begin to build confidence and develop financial literacy.

Exposing children to different forms of budgeting and expense management early in their lives helps them understand more about money. Including kids in conversations about money helps them learn the language, and giving them the opportunity to be included in small instances of financial decision-making helps them learn how to make good purchasing choices.

If kids learn about saving and managing money in low-stakes situations, then they will be better prepared for the larger expenses that come with adulthood. At Capital Credit Union, we are committed to helping you and your family develop a foundation for lifelong money management skills. Read on to learn more about why a debit card for kids can be of benefit.

Kids learn by watching their parents, and it’s no secret that we use our debit and credit cards regularly. Getting your kids a debit card gives them the opportunity to learn alongside you. Some of the most important money management skills you can teach your kids are saving, budgeting, and assessing needs versus wants.

Debit cards are great tools to help introduce children to money management because they allow kids to put money in their checking and savings accounts and then access that money responsibly. Kids can learn how to make deposits, move money between their checking and savings accounts, and keep track of how much money they are spending. With a debit card, your kids can decide how they want to allot their allowance, set savings goals, and begin to make purchase decisions in the moment.

Does it sometimes feel like cash is becoming a thing of the past? Getting your child a debit card gives them the opportunity to have hands-on experience managing money beyond just handling cash. As society continues to progress and digital options become more the norm, it’s important that your children are familiar with all the different ways to manage money.

At Capital Credit Union, we offer Greenlight, a debit card specially designed for kids, teens, and families. Credit union members can receive a free Greenlight card for each child. This is more than just a regular debit card. The Greenlight app features interactive games and hands-on experiences for kids to learn about money management.

The app also features parental controls to help promote healthy spending and saving habits. Featuring real-time notifications and spending history tracking, you can sit down with your child and discuss their spending decisions. As a parent, you will also have the ability to set up direct deposits, manage allowances, and establish spending limits. Establishing the controls with your child gives them the opportunity to have a role in how they will be able to use their debit card while helping them to maintain healthy limits.

Providing your kids with early access to the technology that they not only see you using but that they will be using for most of their adult lives gives them the opportunity to understand the decisions they are making and feel comfortable and confident doing so.

It’s understandable that you might have reservations about getting your child a debit card. Just like with your own debit card, fraud is a valid concern, but debit cards for kids also have additional protections in place. Plus, if your kids have a debit card, you have the opportunity to have conversations with your children about how to protect their personal and financial information. You can teach your kids how to assess whether an online purchase is safe. They can also keep an eye out for suspicious transactions. Kids can begin to build financial safety skills so that way they are second nature as they grow into adulthood.

As a parent, you might also be concerned about your child overspending. Debit cards like Greenlight allow you to receive real-time transaction alerts and set spending limits for your child. You can also review your child’s spending history with them and discuss how they want to use their money beyond just making purchases. Starting conversations about overspending while your children are young is important to help them begin to consider how they want to use their money in the short term and the long term. It helps them establish good spending habits and assess their wants and needs.

With parental controls in place, managing money and using a debit card can be a learning experience, one that can benefit kids in the long run. Rather than starting off with a debit card later in life and in higher-stakes situations, getting your kids a debit card while they are young and have access to smaller amounts of money helps them develop the skills they will need in adulthood—and it can be fun too.