Are you thinking about getting your kid a debit card? It’s a big decision, with a lot to consider. Read on to help determine if your kid and your family are ready!
Many families wonder what age is best for getting their kid a debit card. First, it’s good to understand requirements. There is no minimum age for most debit cards. Debit cards made for kids and families, like Till, are Custodial Accounts, which means that a parent or guardian over the age of 18 is the actual account holder. To open an account, you’ll have to provide identity verification; usually with your address and social security number. Once a child turns 18, it’s best for them to get banking products in their own name to start building credit.
With these technicalities out of the way, let’s dig into the signs that your kid is ready for a debit card:
1. Financial curiosity
Kids can start showing financial curiosity as young as 4 or 5 years old. For the youngest children, this often takes the shape of asking about money: how much things cost, counting money or paying for things mimicking adults. As kids get older, this curiosity matures and kids start thinking more critically and talking about where money comes from, what products, services or experiences cost and whether or not they are worth the expense.
Financial curiosity and understanding of the overall money system is an important foundation for a kid to have. For example, kids should understand that people can hold their money in a bank account and when they take money from an ATM or use a debit card, the money is removed from that account. Using a credit card, on the other hand, is borrowing money from a bank that has to be paid back by a certain date and if the repayment is late, you have to pay an extra fee.
It’s important for kids to understand that money is a finite resource, and therefore, we need to make tradeoffs between wants and needs when we spend. Navigating between wants and needs is the core skill set kids practice with tools like Till’s app and debit card.
2. Asking for & demonstrating more independence
The second sign of readiness is once again not about being a specific age to get a debit card, but rather, it’s when a kid seeks out and demonstrates independence. Independence means different things at different ages and developmental levels, but here, what parents should look for is a kid’s recognition and desire to take on more. This could be related to tasks around the house: perhaps your kid has chores like making their bed, keeping their room tidy or walking the dog. If a kid is regularly completing these types of tasks and expressing interest in taking on more, it shows that they are progressing in their thinking of their own capabilities and comfortable pushing themselves to do more.
This is a great signal of the Growth Mindset, and a kid’s willingness to move outside of their comfort zone. This can signal a readiness to take on more when it comes to financial decision-making as well. Money management has many unknowns, and kids will face challenging decisions when they are thinking through those spend vs. save trade offs. Being comfortable with navigating that ambiguity is a good sign that they are ready to start trying.
3. Desire for earning (and follow through)
“You’ve gotta make money to spend money” - that’s what they say! The next sign that a kid is ready for a debit card is that they want to earn money and are willing to do the work for it. Many kids start their earning experience with allowance, or when they’re older they may get a neighborhood or part-time job. Consistently completing the tasks associated with their job over time shows that they can manage this important responsibility.
Similar to the increasing independence described in Sign Two above, the way a kid manages their jobs can evolve over time. For example, at first a kid may need reminders from parents about the completion of a chore but over time, they complete the chores without reminders. Or, they may have more motivation to improve how well or quickly they complete their jobs.
These actions demonstrate that a kid is not just “going through the motions,” but interested in improving and taking pride in increased effort which may result in a better result. This type of progression in work ethic bodes well for a kid’s ability to continue and even improve their earning potential. When a kid earns more money, they are able to think bigger picture about the financial goals they set for themselves now and in the future.
4. Understands budget basics
Curiosity? Check. Independence? Check. Earning? Check. What’s next? Budgeting. Budgeting is another core skill set that is critical for a kid to develop early on in their experience with money, as it will serve them throughout their lifetime.
Budgeting is the evolution of financial curiosity from Sign One. It means that a kid is ready to think more critically about how money works in the system that they’ve created with their earning and spending. Budgeting involves thinking through wants and needs AND how much money they have now and can earn over time. It means making designations between expenses that change (variable costs - like the cost of toys they want to buy) and expenses that stay the same (fixed costs - like the cost of school lunch every day).
Budgeting is a great place for you as a parent or guardian to get involved and talk about what we spend on and what we save for. These days, with most bill paying happening electronically, kids often don’t see their parents balancing checkbooks, or thinking through a broader financial picture the way we may have seen with our parents. By sharing information with your kids about your family budget, you can help a kid connect the dots for their own spending and saving.
5. Willingness to talk about money
Once you start talking about budgeting, don’t let the conversation stop! When we started Till, one of the things we heard most from families was that talking about money was intimidating.
Often, this was because parents didn’t talk about money when they were growing up: it was taboo. To set our kids off on the right foot with money, we need to be able to talk about it. Money conversations are a great way to share your family values and beliefs about the things that are most important.
Kids being open with you about their spending and saving habits is an important sign of maturity related to money. One way to make this easier for both of you is to normalize these conversations, or as we call them, money moments. Take the opportunity to talk about the meaning behind purchases or expenditures whenever they occur… it shouldn’t feel like a big lecture every time money comes up.
For example, when you’re out at the grocery store, talk about why you may be willing to spend a bit more to buy organic strawberries. Or, talk about the cost advantages of buying in bulk. If you outsource tasks around the house like cleaning, maintenance or yard work, talk with your kids about how you value your time and that sometimes, if we’re able to, we prefer to pay someone else (who may be an expert!) vs. doing it on our own. Don’t forget to ask them what they think about these things, and explore their perspective related to their own wants and needs for spending. Money conversations should be a two-way street!
6. Wants (or needs) to make more purchases
There are scenarios where a kid having their own debit card can make life easier, in addition to giving them a good learning experience. Think about all the times you’ve been out somewhere and they have begged you to buy them something. Having their own money easily accessible on a physical debit card or virtual card on their phone means that you can shift the weight of that decision to them and have them consider the trade-off of spending their own money.
There are also times when (older) kids may be out on their own with friends and they decide to grab lunch or go to the movies. The Till app not only allows you to see what your kid is spending on (via notifications), but kids can also request money from you if they’re in a jam, and you can instantly transfer funds to them.
Fostering a kid’s independence with a debit card is also a great way to give them experience managing money before they’re really on their own. We’ve heard from families who have set a budget for back-to-school shopping and given the kids the responsibility to ensure they get what they need. Others have put recurring bills like a cell phone or streaming service on their Till card. These are real-world experiences that are really only possible by giving your kid that first level of independence, and just enough slack to make a manageable mistake. Remember: mistakes are a great way to learn. And better for them to do that now, while they’re still at home than when they’re off on their own with less of a safety net!
7. You feel ready, even if you don't have all the answers
The last sign to know if your kid is ready for a debit card is if YOU are ready to embark on the journey with them! As you’ve seen throughout the signs above, for kids to be successful in money management, they need the support of their parents, family and community. Like much of parenting, we sometimes wish there was a guidebook or manual with all the answers, but the Till app and debit card act as a tool that make this part of parenting a little easier.
Take the opportunity to help your kid build their confidence and expertise with managing money, and ultimately, be a smarter spender.
