Teen Banking (Our Experience)

Last February, my youngest son turned 13. To celebrate this momentous occasion, I took the boys to Wells Fargo to get them Teen Checking Accounts. They had been using Youth Cash Cards, which were nice but had a couple of drawbacks:

1. They could not deposit checks into their accounts. So, I had to cash the checks for them and then hand them the money so that they could make a deposit. Not a big deal but it is an inconvenience when your kids mow yards or get birthday money via a check.

2. Although I could transfer money into their accounts, I couldn’t transfer money out of their accounts. This was only a big deal when they owed me money for some purchase that I paid for at the store.

3. They couldn’t write checks.

We give our boys an allowance of $50 per month (a nice round number). Their money is divided as follows:

$5.00 – Tithe/charitable
$12.50 – Savings
$32.50 – Spending

We set up savings accounts at the same time their checking accounts were getting set up. I set it up so that each month $12.50 automatically goes into their savings account. The boys DO NOT have access to their savings accounts without my approval.

So far things are going great. I love that I have access to their account information from my Wells Fargo accounts page. I can see where their money goes. They can buy stuff online or at a store. The cashiers sometimes look at them quizically because they aren’t used to seeing kids with what looks like a credit card.

My eventual goal is to figure out how much my wife and I spend on routine expenses for our boys, deposit that into their accounts and make them responsible for making and sticking to a budget. They have to learn sometime and I think sooner is better than later.


7 thoughts on “Teen Banking (Our Experience)”

  1. How old are all your kids now? (I know you just said the youngest is 13)…
    One of the things I struggled with as my boys got older was that “line” between when I quit paying for things and they start. They like to argue the line.
    Once they started working and earning some money (even if just part time) I would encourage them to start picking up the tab for some of the smaller things I would usually pay for them (haircuts, for example). I find this is not always well received. Once they start earning money, and realizing how much you have to work to get that money, they are reluctant to have to spend it (which is good). It is like “but you always have paid for my haircuts – how come I have to now?”
    We made it through that difficult phase of their lives, but I wish I had given more forethought to it before it got here, and made an outline for them as to what I would expect of them as they entered young manhood.

  2. I think you’re doing a great thing. The only thing I would add is that the boys should know that they don’t have to spend all the spending money. It is okay to have money.

  3. Yana,

    Yeah, I didn’t mention it in my post but they do save their money for bigger purchases. They also sell their old stuff when something new shows up on their radar.

  4. I’m doing something similar with my daughter. When it comes to what I pay for, I have a limit. If she wants anything above the limit, she has to pay. It’s working out so far and she’s learning to make that distinction between what she wants vs what she needs. 🙂 Good lessons to learn!

  5. Our boys are 15, 12, and 10. We pay the two oldest $25/mo each and the youngest $15/mo for allowances. For family vacations or visits to the hobby store, they know that they pick up the tab for their “wants;” we still pick up the tab for their “needs.”

    Our oldest has had a checking acct at Chase since age 13 which is tied to our acct so as to avoid any minimum balance requirements. Although we haven’t yet ordered checks, he’s getting along fine w/just his debit card and cash. No eagerness for earning money just yet as he’s very good at saving his birthday, Christmas and Confirmation money gifts. Yes, he also throws some money in the basket at church…but not a true “tither” just yet 🙂

    Our middle child is mowing yards and I’ve planted the seed to open a Roth IRA, but he hasn’t taken the bait yet. He is very good about handing me money and saying, “Mom put this $40 in my college account.” The other 2 usually aren’t so willing to give up access to their moola and prefer that it goes into their savings account. That way it’s not “lost” forever! However, when their 529s dip in value, he is not very happy and can’t grasp where the money went. He’s not alone…

  6. Tracy,

    My oldest is nearly 15 and my youngest son is 13. We also have a 6-year old daughter.

    I think as soon as our boys get “jobs,” we’ll sit down with them and create a budget. I would have no problem with them paying for their own haircuts and some of their clothing. I also think they will be responsible for the bulk (or all) of their car insurance when they start driving. My wife and I will probably do some sort of matching program for their car purchase. Haven’t decided that far into the future yet.

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