It is often said that three in every ten teenagers already own a checking account. Even if this is the case, younger children are interested in learning about how debit and credit cards work as well. If your child wants to learn how to balance a checking account, you may need to go through a series of steps in order teach them about checking accounts. Teaching your children about checking accounts is a great way to ensure that your children learn long-term financial management skills. In addition, it can teach your children how to spend money wisely.
You can start to teach your child about checking accounts by showing them your own check register. While you are showing your child your own check register, you can explain about how each item represents your debit or your credit. You can also explain about how each item will lower or raise your overall balance. You can also show your child how you track your available balance by writing down each transaction that you make.
After you explain your check register, you can talk to your child about the different types of credit that is available. This may include the different ways that money can go into your account and raise the balance. Discuss with your child teller deposits, direct deposit, transfers from other accounts, and the electronic wiring of money. You should also discuss the different ways that money can leave your account.
After explaining to your child the ways that money can leave and enter your account, you should discuss overdraft fees with your child. Explain to your child that the bank will lend money to you in order to cover a transaction if there is not enough money in your checking account. Although this can be helpful, you should explain to your child that you have to pay an automatic fee each time you overdraft your checking account. Explain to your child that in order to avoid overdraft fees, he or she will need to rely on his or her check register. Explain that it is a bad idea to rely on an ATM receipt.
After you think your child understands the basics of a checking account, you may want to give him or her a practice check register.
Give him or her an imaginary one hundred dollars to work with. Help your child record the first deposit and teach your child how to write checks against the account. Watch your child record each check in the register. Once you think your child is old enough to have a real checking account, you should open one for him or her. You can put birthday money or other monetary rewards into this account for your child.
Marc Mackenzie is a freelance writer and blogger who usually looks at checking account deals over at CheckingAccount.Org. His most recent review looked at the best checking account deals.