Why You Should Open a Checking Account For Your Kid (ages 7-12)

  • Checking Account

Many parents open a bank account when you want to start saving money for their future (I prefer you to save money in an investment account, because it will grow faster.  But, many parents default to savings account.

What I’m talking about here is not the type of account that is dedicating for savings for your child’s future.  It’s to teach them how to utilize a bank account.

I want my children to gain financial skills at an early age.  That way, they won’t be clueless when they really need one.

I advocate for opening a checking account in your kids’ name prior to when they get their first job, and need one to direct deposit their paycheck.  Open the checking account earlier, so they can become familiar with how banking works.


When should you open a bank account for your kids?


When they start asking to buy stuff with their own money.  My son wanted me to order a hoverboard off amazon. I replied, you’ll have to buy it with your own money.  

The connection isn’t as clear to kids when you order it using your credit or debit card, and then are reimbursed by your child with cash.  Allowing them to go through the motions of keying in their very own debit card number, shipping address, and name is empowering.


What does your child learn from opening a checking account?


When my son got his debit card, he was so excited to learn about what the numbers on the card are for.  

Mom, what are these numbers on the front of the card for?

Why is there an expiration date?

What are the 3 numbers on the back of the card for?

How can I check to see how much money is in my account?

How do I put money in my account?

Why are the numbers on my debit card different than the numbers on my bank account?

It’s an excellent opportunity to talk about identity theft and protecting your assets from bad guys (“hackers”).  


Why should you help your child open a checking account?


I want my kids to speak Spanish when they grow up.  I know that the key to obtaining that goal is to teach them while they are young.  That’s why I enrolled them in a Spanish Immersion elementary program. When they grow up being exposed to the language, it’s easy for them to master it as an adult.

The same concept works for financial matters.  If we discuss financial topics to our children at an early age, they won’t feel overwhelmed by it when they are older.  By learning financial skills as a child, they will grow up to navigate financial issues proficiently.

Can you imagine how good you would be with personal finances if you were taught basic financial principles as a child?  I believe that because I am teaching my children financial skills at a young age, they will grow up to be better with money than I am.  

We all made financial mistakes.  I made plenty. Hopefully, our kids can avoid some of the really stupid ones that we made though, with a little effort on our parts.  When simple financial principles are imparted to our children, I believe that it will launch them into a prosperous financial future.


What does opening a checking account teach my child?


Understanding how cash translates to digital money in a bank that is a concept that is mindblowing to children.  We need to be patient with them, channel our inner preschool teacher, and teach them the concepts.

Don’t expect elementary, middle school, or highschool to do this job for you as a parent.  It’s too important. Plus, the school system doesn’t have time to take “elective” topics like money management seriously.  They may briefly learn about it in math class, or in Junior Achievement, but that is certainly not sufficient.

You don’t need to be a Certified Financial Planner to teach your kids the basics of money principals.  Focus on the simple lessons:


  1. Have more money in your bank account than what you spend (income must exceed expenses)
  2. If you want to buy expensive things, you need to save your money
  3. Are you sure you want to buy that $$toy$$?  It will drop your checking account down to $5
  4. Saving money is fun!  Watch it grow. Imagine the cool things you can buy with your money


Adult topics, like protecting your passwords, are fascinating to school age kids.  Yes, they are a bit over their heads at the moment, but it does no harm in exposing them to these real-world issues.  They love it that you respect them enough to share these life skills with them.

It’s also a great opportunity to talk about the consequences of overspending.  I taught my son about how overdraft fees will be assessed to his account, if he spends more money than is in his account.  In reality, his card will be declined if he swipes it for an amount that is over his current balance. However, the lesson is strong here.  He was mortified at the thought of being charged $30 for a simple act of carelessness.

They will also be thrilled to receive the bank statement in the mail, with their name on it!  I’m puzzled by this. It seems like a chore, opening the mail. But to our kids, receiving a letter addressed to them, is glorious.  Why? It makes them feel like an adult. Why do little girls play with dolls? Because they are pretending to be a mother. It’s the same concept with the bank statement in the mail -- they feel like an adult who has official mail being addressed to them.  They will puff their chest out in pride, and stick a feather in their cap.


What should they do with their money?


Let them do what they want with it.  Otherwise it will zap the fun out of it for them.

I am toying with implementing an IFTTT rule:

If you spend over $50 on a toy/clothes/game/etc, then you must contribute $25 to your investment account.  I opened an investment account for my kids, and this is currently off-limits for them. While this is another blog topic, my point here is that I think you can structure rules tied to how they use the money according to your family priorities.  For example, you may want to require that they give a certain percentage to church or charity.

However, I will restate my original advice, don’t attach too many strings to how they spend the money in this account.  I know it’s painful when they want to spend $50 on a lego set, when they already have a tub full at home. I try to explain to my kids that lego sets in the store are the same legos they have at home, just with fancy packaging.  They don’t get it. And, that’s ok.

After calming my anxiety (the loud voice in my head that’s rolling her eyes and interjecting: “that’s a silly waste of money”), I remind myself that my priority with the checking account is to teach them those four simple money concepts.  They need to learn these concepts prior to more advanced ones.

Later on, after they master those simple money concepts, you can teach them more sophisticated money lessons.  Such as, foolish versus wise purchases.


How to open a checking account for your child

  1. Wait until your child has $50+ cash saved up
  2. Find a local bank that offers *fee-free checking and *no-minimum balance
  3. Set aside an hour for you and your child to go to the bank, to open a checking account.  (Your name will need to be on the account as well, because they are a minor). Wait until a personal banker is available to meet with you.
  4. Quietly instruct the personal banker to talk directly to your child, not to you (they will naturally address you by default, as the adult).  This will boost your child’s confidence and reinforce the lessons you want them to learn in this experience.
  5. Follow instructions of personal banker to open the account.  Deposit the cash.
  6. Request that the personal banker explains how debit cards work, how to make deposits, and any other instructions.
  7. They will probably print a temporary card for your child to use, until the permanent card is issued and sent in the mail.  Being issued that plastic card will make them feel like they are being crowned a prince/princess. It’s a magical moment!
  8. Teach your child where to keep the card, to safeguard the numbers from hackers and possibly siblings 🙂  Explain that they should never show the card or lend the card to anybody. Only when paying for something should they take it out.