As I mentioned in last week’s post, Little Go From Broke has had his own budget for over a year and it’s been working great.
Up until now though, I’ve still been responsible for the actual money.
Anytime Little GFB wants to buy something, while it comes out of his budget, I’m the one doing the spending.
He just celebrated his 9th birthday recently and I think he’s ready for a little more responsibility. So Mr. GFB and I decided to sign him up for his first checking account.
Being the research junkie I am, of course, I had to see what sort of accounts and tools there are for kids nowadays.
While there’s not a lot out there specifically designed for kids, here’s a brief overview of the ones I found.
The Most Comprehensive Solutions: GoHenry & Greenlight
Both programs offer prepaid debit cards with parental controls and notifications, savings goals, spending limits, and allowance and task-based payment options. Greenlight even has the ability to set a parent-paid interest rate, which would be a great tool to demonstrate the power of compound interest.
The tech nerd in me really wants to try one of these, but since Little GFB already has a YNAB budget and rarely actually spends his money, I think it’s more than we need right now. I also have a hard time reconciling the idea of teaching savings by spending money unnecessarily.
I’m a reluctant pass on these for now but may revisit one if his spending habits increase.
Good for Older Kids: Bluebird
Bluebird is a prepaid debit card from American Express. We don’t actually qualify for this one as your child has to be 13 or over to use it, but I thought I’d mention it for those of you with older kids looking for options.
What I like about Bluebird is the ability to deposit cash at any Walmart.
I can’t stand budgeting cash and our bank doesn’t have any branches in our state to make it easy to deposit. It’s not usually a problem since I rarely find myself with cash anyway, but Little GFB often gets cash gifts on holidays and birthdays so I love the idea of being able to deposit it at our local Walmart.
Unfortunately, he’s too young for this account right now and I’m not sure I’d be willing to switch banks in the future just for that feature.
Not Really a Checking Account: S Is for Savings
S Is for Savings is a unique approach from PNC bank to educating kids on finance. It uses Sesame Street characters to teach financial principles, which sounds pretty cool.
However, it seems more savings-centric as well as geared toward younger kids so not for us. Little GFB already has a savings account and has long since outgrown Sesame Street.
If you have a younger kid, though, this might be worth a look.
The Family Bank: USAA
While I was excited to explore these products, in the end, we decided to open a Youth Checking account with our current bank, USAA.
It may not be as feature-rich as some of the others, but there’s something to be said for simplicity.
First, by going with USAA, I don’t have to create another account (and login) to manage things. Transfers are instantaneous and I still have a few parental controls in terms of notifications and spending limits.
Second, he already has a savings account with USAA which makes all our accounts nice and neatly organized together.
Little GFB’s spending is pretty rare so I’m thinking this more basic approach will work well for us.
However, I’m willing to reconsider the more robust options as he gets older or if his spending habits change.
An Addendum: ECCU
Just as I was finishing up this post I got an email about another youth-targeted account.
There are no fees or minimum balance requirements. It has a budget feature, a spending management feature and parental controls like spending limits and text alerts.
The accounts are divided into age ranges 0-7, 8-12 and 13-17. I’m not sure if the actual functionality is different depending on age, but the idea seems to be for parents to manage the youngest kids, co-manage the 8-12 year-olds and let the older kids bank on their own while monitoring their activity.
Each account receives a debit card, but cards issued to kids in the 0-7 range will have their parent’s name on them, while the older kids will get a card in their own name.
We chose simplicity over features but any of these accounts would be a good way to teach your kid how to manage their money. Here’s a quick chart showing you how the different accounts compare.