Sunday, June 26, 2016

Don’t Give Cash To Your Teens

No Teens Dollar

Many parents are afraid of giving teens a card instead of cash. Time to reconsider.

Here are six reasons to ditch the cash:

  1. It isn’t clean. Did you know cash is infested with up to 3,000 types of bacteria. Yuck! Cards are nice and clean. (Okay, unless your teen is a bit of a germaphobe, this is more of a fun fact than a real reason.)
  2. It isn’t safe. If cash is lost or stolen, your teen is out of luck. Cards can be locked to prevent unauthorized use. If unauthorized purchases do occur, they can be reported and recovered.
  3. It isn’t transmittable. Cash can’t be teleported to your teen in an unforeseen situation or emergency. Parents can load a teen’s card immediately in a pinch.
  4. It isn’t tracked. Cash disappears without a trace. Cards automatically track purchases and running balances. That means more transparency, accountability, and awareness. Tracking is also the first step toward budgeting.
  5. It isn’t online. Cash can’t be used for online purchases. Every teen consumes goods and services online. That means your teen must be using online accounts linked to your card. That’s a financial disaster just waiting to happen.
  6. It isn’t reality. Your teen won’t be using much cash as an adult. The future of money is more virtual, not less. Better to learn the ins and outs of cards and electronic money now under your tutelage while the stakes are still low. As the saying goes, “If you think education is expensive, try ignorance.”

So what kind of card is appropriate for your teen?

Try starting with a reloadable prepaid debit card or a bank debit card. That way, there’s no risk of your inexperienced teen running up debt with a credit card. Debt is one parental fear about cards that I wouldn’t reconsider.

The bottom line: dollar bills are bad for your teen, and so is debt. Go debit.

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