Why we gave our kids debit cards

We started giving our kids allowance when they were four and six: $4 per week for our four-year-old daughter, and $6 per week for our six-year-old son. One dollar per year of age, we figured, was pretty reasonable.***

***It eventually (quietly) got downgraded to be a biweekly allowance because WOAH it was adding up quickly as they turned five and seven, and then six and eight. Giving our eight-year-old close to $40/month in disposable income felt … like too much.

They “earn” their allowance by keeping their rooms reasonable (C has lost her allowance at times if her room’s a disaster) and generally helping out around the house. Nothing too crazy. They’re responsible for feeding the dog and giving her fresh water, letting her out to pee, scooping poop, etc. They fold laundry with me when I ask. (C loves this. D does not.) If they make a mess on the floor, they know how to sweep it up into a dustpan. They always have to bring their dishes to the sink and push in their chairs.

Since we’re not a household that’s big on carrying cash — everythinggggg is digital for us — we quickly realized it wasn’t going to be possible to pay them in actual toonies or fives or whatever. Nope, just not happening.

And so, on Oct. 11, 2016, we brought them to their first-ever bank appointment and set them each up with their own account. I also set them up as “payees” in my account, so I could automatically transfer their allowance.

They actually ended up getting Debit/VISA cards, since that’s just what most debit cards are these days.

A four-year-old with a credit card?! LOL WUT?

Ready for a lil’ Q&A about kids and debit cards?

Do your kids seriously have credit cards?!

Yup! Sort of! The VISA aspect of their Debit/VISA *has* been handy when the kids want to use their allowance to order something online. Y’know, as kids do these days!

They can’t spend more than what’s in their account, so it’s not a true credit card. It’s more like one of those prepaid VISAs.

Instead of me putting through the order and transferring the money to myself (from their account), they can order it in their own name. (And getting a package in the mail ADDRESSED TO YOU is a big deal when you’re in elementary school.)

Do they carry their debit cards around on their own? What if they lose them?

Mostly, the kids use their Debit/VISA cards as actual debit cards. I keep D’s in my wallet (at his request), while C prefers to keep hers in one of her many purses. (It occasionally goes missing for a while, but has never been lost for good.)

How/when do your kids use their debit cards?

If we’re in a store and they want to buy something, they ask me to check their balance. I log into their account using the banking app on my phone, take a screenshot of their balance, and show it to them — reminding them they need to tack “a few dollars for tax” onto the price of whatever it is they’re interested in.

Can they use their debit cards to buy anything they want?

Nope! Sometimes they’ll suggest something and I’ll just refuse, as the parent. (A violent video game, an enormous bag of candy, or something else I just don’t want them to have.)

Other times I’ll sort of roll my eyes and ask if they REALLY want to waste their money on X or Y — usually a cheap toy I know they won’t actually play with, or something that’s going to fall apart if they look at it. But they remind me it’s their money, and … yeah, OK, fine.

What are their spending habits like?

You can definitely see their personalities in what they buy and how much they spend in a single go.

D will buy art supplies and/or fabric for a little project if we’re in a store like that, but he’ll usually save up his allowance until he can buy a LEGO set.

C is famous for saying “I wanna waste ALL my money!” which means she wants to spend every damn cent in her account. Yes, “waste.” Oh man. She is the kid who will make two or three transactions in a single store and have me check her balance in between to see how much is left. She usually buys LOL Dolls, art supplies/fabric, or this weird modeling clay that she loves but only uses for about two seconds.

She gets frustrated because D always has more money in his account (he SAVES IT, girl) and sometimes she’ll decide to save hers, too. I hope she’s learning. I don’t know. Maybe?

Do they remember their PINs?

Yup! (They’re pretty cute pins, to be honest.) They love remembering their PINs and getting to punch them in. (I specifically asked the bank NOT to enable “Tap,” so they’d have to remember their PINs — and also in case they lost their cards.) I’m always over their shoulder, whispering to hit “Chequing” and “OK” or whatever.

Then they beam with pride when the salesperson hands them their receipt. (C actually keeps ALL of hers, so her future accountant is going to be very pleased with her.)

What if they forget to bring their debit card on a shopping trip?

If they don’t have their debit card with them when we’re out, I’ll usually agree to buy it for them with mine (as long as I AGREE with the purchase, ahem). I pay for it, and then I log into my banking app and send myself an e-transfer from their account to cover the cost. Everybody’s happy.

What if someone gives them cash for a birthday?

Oh, they like cash, too. Often it’s a matter of explaining “You have $10 in cash and $18.29 in your account,” and they either pay with one or the other or combine them for a larger purchase. (“Ten in cash and the rest on debit, please.”)

Do they have to save any of it?

No, it’s all theirs to do as they please. We have separate RESPs for each of them, so that’s where the “important” money goes (i.e. an RESP donation from the grandparents at Christmas) to be saved for college/university someday.

Do YOU ever buy them anything?

Yes, BUT not a lot.

We have a tradition that on report card days, we go to the Needs (gas station) near our house and I buy them “any treat they want.” (It sounds much flashier than it is, because … it’s a gas station!)

I take them out to McDonalds or to go bowling or to the movies or something? I pay, of course, because it’s a family experience — not just buying crap.

If we’re in a Dollar Store because I need to buy something, I might say they can each pick one thing (knowing it’s in the $1-$2 range). Sometimes they’ll get a treat here and there when we’re out shopping (and I pay) but honestly, I’m not often in stores with them so it doesn’t come up a lot.

If they want something in their school’s book fair? They pay for it.

If they want to pay to download a video game, like Minecraft on the PS4? They pay for it.

If they desperately want a toy or a craft kit or art supplies in a store? They pay for it.

It’s easy to say “If you really want it, I’ll check your balance.” Often they don’t want it badly enough to actually pay for it themselves.

***

TLDR; I like that our kids have debit cards. It’s easy to transfer them their allowance (which we give them so they learn how to manage money + that we’re not just going to pay for everything).

xo