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Learning Financial Responsibility - Your First Checkbook

Posted by Kevin Walli | Thu, Jul 19, 2012 @ 10:00 AM

check boyTeaching young people how to manage money and be financially responsible should start when they are still young. When my daughter was in the 5th grade her class assignment was to open and manage their first checking account. They were given an amount of money to start their account with, not real funds of course, but enough of a dummy account to pay their pretend bills.

The most valuable portion of the exercise was managing the check register and keeping an up-to-date balance in their checkbooks. The class learned that when they spent money on CDs or food that they had to subtract that amount from their balance and keep it current every time they spent some of the funds from their checking account.

Another valuable lesson was getting the returned checks from the "bank" and matching the bank statement up with their check register. They learned that if they missed just one deduction that the whole check register would be wrong from that point forward. I recall having to track down the missing payment and using a pencil eraser to rework the check register to correct the balance. It was a great lesson for 5th graders and it showed our kids that when we spend freely on "fun stuff" we might not have enough to cover the power bill or the grocery bill. They learned that money was tight and that they had to put a lot of thought into how the money should be allocated.

Checking accounts are a valuable way of tracking your expenses. Can you imagine giving a young person a credit card and letting them run wild? Many parents have regretted not teaching their kids the responsible use of money. Checking accounts provide a vehicle to easily balance the account at the time the check is written. If nothing else it has them thinking that the funds are out of the account at that moment when they deduct the amount on the register.

A bonus of this "life lesson" is that you can also start a savings account at this time and have them write a small percentage of their income to be saved for a rainy day. As with all young folks, they will have rainy days ahead of them and it would be good for you as parents to instill this discipline in your kids at a young age. Many banks offer "starter accounts" for teenagers with low fees and overdraft protection. Having an established checking account will also be very valuable when they apply for credit for the first time.

Do you have any tips on teaching financial responsibility?  We would love to see your comments.

 

Written by Kevin Walli

Kevin Walli is an award-winning graphic designer with 18-plus years of experience in graphic design, web design and photography. Flexible and creative with an excellent sense of humor, Kevin enjoys spending time with his family, photography, reading, music and sports.