Prepaid Card for Allowance?

I was bad about remembering to pay the boys, and some weeks they would not do their chores but since no one kept track we never really knew what was owed. So I made up a chore list and each day they do the list on their own with out me pushing they earn a star, each star is worth $1 (may go up as they get older). When they want something (a new app for their kindle or what not) they can cash in the stars. I have a dry erase board I use to record their stars, and then I simply erase them when they are spent or cashed in.

I got my first checking account when I was about her age (not sure what the age restrictions are now but that was a long time ago--LOL!). What we have done for my kids is a modified version of that. We have a "virtual" checking account since they are both too young to have a real one. I took some old checkbook registers and we add their allowance in as well as any money they might receive for birthdays, etc. This way they have a running total of what they have to spend and when they want money we just deduct it from there and give them the cash at that time but they are still learning money management skills. Also, because the banks interest rates are so low right now, we give them our own interest rate % monthly--it's slightly above what the bank would give but is from the Bank of Mom. :-)

We moved on to pay our kids monthly their entire allowance. How they manage it is up to them. If they loose it, that is their problem not mine especially when they become teenagers.

I like the idea of the visa giftcard but she still needs to learn how to manange actual cash too. Your local bank may have special programs for teens to become familiar with banking. It's worth a look into. In 3 short years she will be an adult in the eyes of most places and should be prepared for that. Your job is to prepare her. Now is the time to start.

Great question.

I think its a great idea. I think there is a good card called the rush card. its a pre-paid card and you can use it anywhere. Good luck!

I'm not sure if I would go with a gift card. I think I would prefer a bank account. You could set up a monthly or weekly deposit, so you won't forget and she could get the cash out if she needs it. Or you could give her cash and transfer the amount back into your account if she is too young to be able to get her own cash out of the account. I also like the idea of the mom who suggested the virtual bank account. That's probably the easiest way to handle it, without having a real bank involved.

I mainly would not opt for the gift card because it implies that the entire allowance is spending money. An account at least has some focus on saving. Also I think she should have at least some cash. it's really nice for the kids to be able to donate some cash to fundraisers. My kids love to put some change into various donation boxes. It makes them feel good to give a small part of their money to the less fortunate.

Just get her a bank account.

Pre-paid cards charge each month for usage, charge you to fill it up, and charge a yearly "maintenance fee." Not worth that wasted money, in my opinion.

I know you said no debit card but that's what I gave my kids when they started driving, at 16. I was able to open accounts directly connected to mine, so there are no fees, it's easy for me to transfer them money AND they learn how to manage a bank account. My son (now 19) has never been overdrawn and my daughter (17) was only overdrawn once, by about $3.
It's worked out really well for us, you should consider it!

Talk to your bank. There may be a "young savers" account that you can get her that comes with a debit like card that she won't be able to over-draw on.

My 15 and 17 year olds have debit cards with Chase where our family accounts are. Chase has a student debit card that they CANNOT overdraw and there are no fees. Once they hit 18 or 21 it turns into a regular debit account ( need to check that age!) and my girls are very adept at checking balances online, etc.
Has not been a problem at all and I can transfer money online in about two seconds.
It has actually solved many problems as I don't usually have cash but I can easily transfer money. They both prefer carrying the card to carrying cash. My youngest even takes her cash to the bank and deposits it so it will be on her debit card.
Beats what I did with my oldest which was give him a credit card when he started driving-just for gas. He's 21, we just moved him into an apartment and he does not know how to write a check, doesn't know how to check a balance online and is basically clueless about banking.
We had tried the virtual checking account but it didn't really take-neither one of us kept up with it. Besides, no one really writes checks much anymore. I've read most 20 something's and below don't ever carry cash and I foresee that becoming more common rather than less.
Too little, too late with him-we are having to play catch up. And yes, I had to take that credit card away because it became way too easy to use for $6 and $10 fast food lunches which eventually started being about $600 a month in junk food.
Get the debit card.

i think it's a good idea. you can just reload a visa gift card.
my older son and i were just like you and your daughter. for a while i went with 'it's your responsibility to remind me, and if you don't you lose it' but that seemed pretty mean since i was just as forgetful as he.
the losing cash is a little worrisome, though. at a15 she should be able to keep track of her cash.
but i think a visa gift card is just what you need.
khairete
S.

I wonder if the bank offers blocking the over draft fee option. Where the card just stops when there is nothing left in it. At a getto grocery store my card was denyed. The clerk said "perhaps there no more money in it". Which come to find out the reason it was declined is because I had it set up to no more than three transactions per day (i dont use the card often).

If you can set it up through a bank I would think this would be the best option because then she could get a savings account.Bank statements and I would imagine the fees if any being very small.

Like you, we are not good at staying on top of the allowance process. But I am not a fan of these pre-loaded cards for sooooo many reasons.

My biggest dislike for these cards is that it sets up a habit for kids to use a card and lose touch with the fact that they are spending money. Hasn't it happened to us as adults? We spend $60 with a swipe of our debit card without much thought and true realization that we spent 3 twenty dollar bills. Think of dinner out - we can go to the grocery store and spend $10 buying ingredients for our meal, or spend $30 on take-out or $100 at a restaurant. Don't you think that we would spend that $100 much less quickly if we were counting out the cash?

Then of course, we have the fees. There's also the addiction to the card (make kids feel a sense of being grown up without the responsibility).

So I would rather muddle through using cash than begin to set up the plastic practice. Wait til they are in college - the credit card companies will hunt them down at that point...

I'd be hesiant to go this route, as once the money is on there you usually have a fee to get cash back. Plus, will she really want to use the card to buy a soda or treat for herself? That might be encouraging a bad habit to use plastic for everything.

I opened up a teen checking account at Wells Fargo for my teen daughter. I'm already an account holder there so there is no fee for her account. With the account, we get a debit card, a check book, and both a checking and savings account for her. It's linked to my account, and I have a duplicate debit card. I can go online, look at activity, transfer money right to her account, etc. It's great. Oh, and we were able to set limits as to how much she can withdraw and spend POS each day. This is a perfect setup for us. Last year when she traveled to DC I dreaded sending enough cash with her to get through the week. Not an issue anymore. I can change the limits at any time. And if she were stuck somewhere without enough money I can transfer right to her account instantly. I foresee her using this account all the way through college.

She has a small PT job and we have decided that 1/3 her check goes to savings, 1/3 to checking (for use with the card) and 1/3 cash for 'walking around' money. The bank can do all that for us when she makes a deposit.

It's the best of both worlds, I think. She has a small amount of cash that she learn how to be responsible with. She can learn how spending with plastic affects her net worth, and she's saving some too. (The savings also acts as overdraft protection.)