As parents, we worry every day about our children. Mostly, we worry about their physical and mental wellbeing, but as they get older we worry about their financial health as well. Teenagers and young adults simply don’t have a lot of experience handling money or working within a budget, so wouldn’t it be great if there was some way to get them that experience and teach them solid financial habits with a minimum of risk? Well it turns out there is a way – by setting them up with student debit cards.
Prepaid debit cards have been around for a while now and they’re great budgeting and spending tools. A student debit card is simply a prepaid debit card that’s geared for young adults. You can find them often sold as “second” cards – an additional card on a parent’s account. But they come with the same spending options, the same reloading features, and bill paying benefits that other prepaid cards have. So what is it that makes them great tools for helping kids form good financial habits?
They Teach Real-World Budgeting Skills
These cards must be loaded up with cash before they can be used. That elevates the value of that cash and causes students to think a bit before they spend it. Just as moms and dads have had to think about their spending choices to make their money last to the end of each month, now youngsters using reloadable debit cards must make the same kinds of choices. Is something really necessary or is it just an impulse buy? Students soon learn that their money doesn’t last very long if they don’t budget it properly.
They Teach Freedom but with Responsibility
Having a prepaid debit card of their own gives students a certain amount of freedom they’ve probably not had before. They’re not tethered to their parents quite as much and are free to use the card whenever or wherever they choose. But hand-in-hand with that freedom is a tangible level of responsibility. That’s because managing their card is now their job – no one else’s. They need to watch the balance; they need to arrange to reload it; they need to make the spending decisions. Student cardholders soon learn that there’s a certain amount of work that goes with the freedom they’re enjoying. And that’s a lesson that can be transferred into many other facets of their lives.
They Come with a Built-In Safety Net
There’s a double-dose of security that comes with a student debit card. First, there’s no credit involved with these cards so a young cardholder can never spend their way into debt like they could with a credit card. Second, since most of these cards are actually an additional card on a parent’s account, parents can monitor the spending and loading activity to make sure there are no problems. That means kids with prepaid cards can use them with less worry than credit cards. It also means parents can have a certain amount of peace of mind when it comes to their child’s spending. That’s a win-win.
Student debit cards are quite simply great financial tools. They teach kids the value of a dollar as well as the value of a good spending decision. At the same time they give their cardholders the ability to make purchases in stores or online in the same way that they could with a credit card. But they don’t have the dangers associated with a credit card. After just a few short months using a student debit card, kids have acquired some extremely valuable real-world experience and are well on their way to leading solid financial lives.
