I think my thread title sums it up. We want our son to have access to money, but not just give him an open-ended credit card.
Any suggestions? One person suggested we consider giving him a Gift Card with a couple hundred bucks loaded onto it each month. I am open to that. I was thinking there might be a card that can be tied to my account, but can be set up with a fixed amount and then I can reload it monthly, but I haven’t come across that.
Thanks for any tips!
I suggest that he open a checking account that you transfer money to. Perhaps an online bank such as Ally. ACH transfers take two to three days from your bank account to his. If you have an account at the same bank then transfers should be quicker. He can do all spending on his debit card, or get cash at an ATM.
I mention online banks as they usually don’t have any maintenance fees, which usually make a checking account at brick and mortar banks an expensive deal. Prepaid cards probably also have fees, they did several years ago when I considered getting one.
Yes, I have thought about that approach. I am talking with him later today and will look at that. Thanks!
I expect a debit card will have more protections in cases of fraud or theft than a prepaid card. And of course credit cards are safer in that respect than credit cards, but you’ve indicated you want to avoid that.
I had my own checking account, with a debit card, and a “for emergencies” credit card with what I assume would have been hell to pay if I’d misused it. Never did. It came in handy too for anything they wanted to pay for but where they wanted me to do the legwork.
I recommend asking him to track how he spends money (both his own and whatever you give him). He can use something like Mint, or just a spreadsheet or text document. The idea isn’t for you to nag him about how he spends his money, but for him to understand where it’s going. He may realize that a good chunk of it is wasted. (That’s probably true even for those of us who are self-sufficient.)
This is what we ended up doing for our oldest when he went off to college. We found that the prepaid cards could be problematic - there were always fees, whether an activation fee or a monthly use fee. The biggest issue was the cards would initiate hold at certain times which meant he couldn’t use the card for a certain period of time. Twice he got gas (which put a hold on a certain amount, I think $100 until the purchase cleared) and he was unable to use it at the grocery store at the same time…
We only put a couple of hundred dollars at the most - he was working on campus, and frankly, the best way to teach him financial responsibility was to limit the funds we gave him. We paid for room and board, so it wasn’t like he wouldn’t be without a room or ever go hungry, but date and beer money were on his dime.
Once we set up the online bank, we could transfer money immediately. Fortunately, between his job on campus and his summer jobs, we gave him very little money past his freshman year as he never asked and didn’t need it…
What is his college living experience like? Living in a dorm - where if you spend all your cash but still eat on the meal plan is a different set of needs than living in an apartment. Or even living at home and needing to put gas in your car.
My daughter is going to college next year living in a dorm. I think we will have her use her current teen checking/cash card account, which I have access to as a co-owner on the account. If I need to move money into it, I can. If I need to help her see where she is spending it, I can. But I honestly don’t see her spending all the money she has in that account - resident campus life where she is going isn’t going to be a spend fest, she won’t have a car on campus - and she has a few thousand dollars from working - and will have some more with a Summer job.
I might have her set up an account at a local bank that I don’t have access to. Our bank doesn’t have branches out there, and she might need to cash a check or something.
She also has one of our AmEx cards in her name that she can use to book airfare home. She’s had it since she went to London with school last year, and has shown herself to be responsible with it (she uses it only when we say “yes, we will pay for that, put it on the AmEx”) and a Target card that bills back to us that she uses to buy her shampoo and stuff. Her cell phone is on our family plan.
My son lives at home and goes to school. He uses his teen checking account and its his money - but I do put money into his account if he shows up with a receipt for something like tennis shoes that I’ve agreed to pay for (this is less frequent since he graduated high school and works while going to school - he has “lots” of money - where lots is a nineteen year old living at home and busing tables three or four nights a week). He also has a Target card that bills to us for his personal needs (shampoo, toothpaste). He gets $30 a week into his account from us for gas and car expenses - that’s still a school expense. He hasn’t needed an AmEx card because he hasn’t chosen to travel on his own (he and his buddies have taken a few road trips, but only since he turned 18 and became a legal adult). He’s had the account now for probably five years and has never overdrafted. He’s bought some questionable things (bongs off the internet), but has been responsible in never spending more than he’s made.
But both my kids have had access to a cash card on their own account since middle school so they are pretty used to doing things like checking their balances through their phones.
Take a look at the BlueBird Card. It’s a prepaid card that kind of acts like a bank account with no fees in many cases.
The lil’wrekker is a spender, we keep close purse strings on her available cash. This is her freshman year and she has had a couple close calls. She gets a food card with her dorm and scholarship monies. But the prevailing culture in her group of girls is to trade and use each others card at different times. Cards are misplaced easily. So far she hasn’t mis-used her bank debit card, except to use every penny we put in there. We are actively working on her spending habits. This is gonna be a hard lesson for her I think. To the OP, get ypur student in a separate account with set monthly allowance, one that has a safe debit system, that you control for this first year. My plan is to wean my student off my help as she proceeds through college ( I hope). Good luck.
I don’t know how these things work in the US but I would recommend opening an account with a bank with a physical presence nearby. Simply because if he’s successful or in need there will be someone with whom he can actually talk. And if he’s imprudent, a dressing down from a bank manager will be far more effective than one coming from you.
Most colleges above a certain size will have a bank branch (or even a credit union branch) on or near campus that caters to the student crowd. They may have lower minimum balance requirements and one or more ATMs convenient for the students. At my school, this was in the student union.