From Piggy Bank to Debit Card: Tips for Teens Managing Money

Finally starting a first job or gaining some financial freedom is an exciting milestone in many kids’ lives. But managing money can be a challenging step when kids go from receiving birthday cash once a year to earning a regular paycheck or allowance. Some teens want to spend this new found money on the latest clothes or movie tickets with friends, while others take a more cautious approach. Either way, before your teen moves from a savings account and piggy bank to a checking account and debit card, there are a few important lessons worth sharing.

When your child has a piggy bank or a savings account, there’s often no card attached to their money. It’s cash-based, and they can physically see the money coming and going. That’s a great way to start and help kids understand the real impact their choices have on their savings.

But when the time comes to set up a checking account and give them more financial freedom, it can be a bigger step than they realize. Suddenly, they have a piece of plastic that feels like it has no end in sight (or so they think). Remember when you got your first checking account and subsequently debit card? You may have known there were limits to only what cash was in your account, yet those first few weeks still felt like you could go anywhere in the world.

With cash, it’s easy to look in your wallet and see that you only have $5 left to spend. But if you’re not paying attention to how much you’re swiping (which let’s face it, can add up quicker than we’d all like to admit) you can find yourself in the red and subject to some not-so fun fees or lessons. While most financial institutions offer protections, like automatic transfers from a savings account, it’s still easy to overspend if you’re not keeping a close eye on your balance.

When switching from cash to a debit card, it’s important to sit down with your teen and talk through the limits of their card. Encourage them to treat it just like cash. It’s only tied to the money in their account. Whether that balance comes from a biweekly paycheck or an allowance, it isn’t endless (no matter how much it might feel like a bottomless basket of breadsticks).

One helpful way to make those limits more visible is by setting up account alerts together. Text alerts for every transaction, low balances, and direct deposits create instant awareness and can help reduce those moments of dipping into the red.

Another important lesson is the added security that comes with owning a debit card. Now, your accounts have PIN numbers to punch in when you make a purchase. While it might seem harmless to teens to share that number with their best friend, doing so gives access to all of their money. Teaching them to never share their PIN or account information with anyone is an important life lesson, and one that helps protect their hard-earned money early on.

Another good tip is to contact your financial institution immediately if your card is lost or stolen. They can freeze or block any spending until the card is found or a new one is issued. At Crane Credit Union, we understand that losing a card is a frustrating reality. If this happens, head to your nearest branch so our team can help you deactivate the old card and get a new one printed and, in your hands, quickly.

Moving from piggy bank to a debit card is one of the biggest leaps towards adult financial life. The goal is to give teens habits and confidence they’ll need when they’re truly on their own. These tips are a great starting point for guiding them toward becoming money-savvy adults. Youth and teen accounts can be opened at any Crane Credit Union branch. Stop by today to get your child started.