December 9, 2022

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Why kids should have cards from an early age. Some banks have products dedicated to children from 6 years

With the start of school, many students also start receiving pocket money. Some cash, others even on their own cards, especially since banks have started to issue such cards even for preparatory class children.

Why should a child have a card from the age of 6? Because it is the age at which children can already receive money for various activities they do at home, to understand that work is needed to earn money, say economics specialists. Even the little ones can start to save in turn, to understand that they need to put money aside to buy various toys that they want. And more importantly, to understand that money is limited and that they need to make good decisions when spending it.

Then, from a slightly older age, it’s good for them to have a budget too, to have their own finances and learn to manage them, even if their parents buy them what they need and, if we’re talking about school, they get a package from home.

So, if they decide to give them some spending money, the parents can decide a certain amount to give the child daily, then why not weekly, to make their own budget.

They can give them cash or even make their own card to help them learn to manage their money.

Therefore, some banks have products dedicated to children starting from 6 years old, others for older children, from 10 or 14 years old. They are cards made in the name of the children, but of course they are attached to the parent’s account. In general, there are no commissions for these or they are reduced. Children can put there their savings, money from relatives, from parents and even scholarships, if they receive from school. And there are some banks that offer interest on the accumulated amounts, a small profit to encourage them to save.

Everyone decides what is best to do, if it is okay for the little one to take the card to school or on trips, or if they can keep it at home and use it together for shopping. However, parents can largely control what their children do with their cards. First of all, they can control the account from the bank’s application, they can top up the card and they receive notifications when the child buys something. Obviously I can also see what store it was used at. Then they can set a limit, an amount to use per day and if it is misplaced by the child, the card can be blocked at any time in the app. Another advantage over cash is that parents can top up the card at any time, for example if the child is away on a trip or needs money for something specific.

However, specialists recommend that this should only happen in special cases, not that they frequently receive extra money if they spend what they initially receive, because it is training for adult life and they must understand if they do not good choices, I’m running out of money. Also, this pocket money exercise helps them differentiate between need and want and make their own plans for various things they want.

Even if we are talking about older children, about high school students, they can even start making small investments.

Financial education is extremely important in the family, therefore, but let’s not forget that the new school year comes with good news and this subject is also introduced in schools.

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