What is a checking account?
A checking account is something younger children should have at least general understanding of and something older children and teens should have some form of experience with.
Does a 13 year old really need a checking account?
Of course not. But the earlier a young person really gets the concept, function, and responsibilities of a checking account, the fewer mishaps they're going to experience when they're out there on their own.
So what is a checking account, and more critically, why is it important?
The most basic definition is that a checking account is any account that allows you to draft payments from your deposited funds to third parties.
In short, it allows you to conveniently pay your bills.
It eliminates the need to carry around wads of cash and pay people in person. The form these draft payments have historically taken is in the form of checks, hence the name checking account.
But in the world of online banking, ACH payments and transfers, direct deposit, and online Bill Pay, physical checks comprise a smaller and smaller percentage of checking account transactions every year.
It's really not that important how you pay your bills. But what is important is the central function that a checking account plays in a healthy financial life, and your ability to communicate that to your children.
As adults, we're so familiar with checking accounts that we often take them for granted. Our kids, on the other hand, don't have that same 10 or 20 years experience of paying bills on which to fall back.
So here then are the two critical things your child needs to "get" about checking accounts to help him or her transition into a successful financial adult:
That's basically all there is to it. The rest is them just gaining experience and learning to use the tools of a checking account . . .
I believe every parent should involve their children, especially by the time they're teens, in the actual nuts and bolts bill paying process.
Make it a ritual, or some kind of regular occurrence. Perhaps once a week at the same time you sit down and go through the bills, balance your checking account, monitor the finances.
Show your teen what it is you do, how you do it, and how nice it feels when you're done and you know to the penny how much money remains in your account.
It doesn't have to be an all or nothing, one size fits all approach. It's like anything else child-rearing related - familiarity followed by increasing responsibility.
Obviously, you wouldn't expect (or want) your toddler to try his or her hand at balancing your check book, but there's no reason why you can't have your responsible teen take on the task (as you watch and double check, of course).
They may not always thank you right away, but by involving your child in your own real world finances, you'll be doing him or her (or them) a huge favor when it comes time to that first job and paycheck.