Both our girls have checking accounts at local banks with branches near the colleges they attend. They have debit cards tied to the checking accounts, and use those for the bulk of their spending. They also have savings accounts at those banks, and they keep most of their money in the savings accounts with only relatively small amounts in checking. This is done as a way to mitigate the risks in case their debit cards get stolen - gives them the ability to still have liquid cash while the bank works through the process of returning fraudulently-used money back to them.
They also have a copy of one of our credit cards, for use in emergencies and for other expenses that we authorize (ie books, other school supplies, etc). We've told them that we expect a phone call before they use our credit cards if it's safe to do so, and (if not) as soon as possible after it is safe. Thankfully our kids are responsible with this and we have never had issues with abuse.
As other posters have mentioned, how kids handle and use money is a lot different nowadays. For example, my kids generally do not use cash - pretty sure they have never used the ATM on their campuses, and I'm pretty sure they don't even know where they are on campus. They have never written a single check. Instead, all transactions are done via debit card, and they reimburse each other for shared expenses via Venmo. (I recommend getting them an Venmo account as soon as they turn 18, all their friends will already have one.)
Both my kids have had jobs, and all but one employer required the use of direct deposit for their pay. Of those that required direct deposit, none required a voided check - they just needed to have the bank ABA and account numbers. Which, of course, triggered an immediate text to me the first time they were asked for it because they didn't know what they were at first. (I also got calls from them on filling out their W-2 forms. Pro tip - find out what the minimum income is to file a tax return in your state, and assuming your kid falls below that just have them file "exempt" from federal and state withholding to avoid the need to file returns.) For the one employer that issued physical paychecks, the kid would just endorse the check and do a mobile deposit to their accounts using the banks' phone apps. No need to go into the bank to cash paychecks.
On the need for a local bank branch - they won't need it very often, but when they need it they will REALLY need it. Scenario - kid loses their debit card, and/or identify fraudulent activity on their account. If they have a local bank branch, they can just go to their local branch and get things figured out quickly, and walk out that same day with a brand-new debit card. But if they have an internet-based bank, they're dealing with phone calls and possibly a few days' wait for a replacement card and checks. That may be OK if the kid is at home and doesn't have much in the way of spending needs, but if the kid is off at college they'd need to have another payment method which is a pain. Remember, kids generally cannot have credit cards in their own name in the absence of any W-2 income....not like the good ol' days when they hand them out to any college kid with a pulse.
I know this because it happened to my oldest when she was off at school. She had an Alliant Credit Union account at the time, and it literally took her ***hours** on the phone to get it all straightened out. On top of that, it took a week for her to get a replacement debit card. We switched her to a local bank shortly after that, and she has used it once or twice for replacement debit cards. Like I said, very handy in the rare case that it is needed.
They also have a copy of one of our credit cards, for use in emergencies and for other expenses that we authorize (ie books, other school supplies, etc). We've told them that we expect a phone call before they use our credit cards if it's safe to do so, and (if not) as soon as possible after it is safe. Thankfully our kids are responsible with this and we have never had issues with abuse.
As other posters have mentioned, how kids handle and use money is a lot different nowadays. For example, my kids generally do not use cash - pretty sure they have never used the ATM on their campuses, and I'm pretty sure they don't even know where they are on campus. They have never written a single check. Instead, all transactions are done via debit card, and they reimburse each other for shared expenses via Venmo. (I recommend getting them an Venmo account as soon as they turn 18, all their friends will already have one.)
Both my kids have had jobs, and all but one employer required the use of direct deposit for their pay. Of those that required direct deposit, none required a voided check - they just needed to have the bank ABA and account numbers. Which, of course, triggered an immediate text to me the first time they were asked for it because they didn't know what they were at first. (I also got calls from them on filling out their W-2 forms. Pro tip - find out what the minimum income is to file a tax return in your state, and assuming your kid falls below that just have them file "exempt" from federal and state withholding to avoid the need to file returns.) For the one employer that issued physical paychecks, the kid would just endorse the check and do a mobile deposit to their accounts using the banks' phone apps. No need to go into the bank to cash paychecks.
On the need for a local bank branch - they won't need it very often, but when they need it they will REALLY need it. Scenario - kid loses their debit card, and/or identify fraudulent activity on their account. If they have a local bank branch, they can just go to their local branch and get things figured out quickly, and walk out that same day with a brand-new debit card. But if they have an internet-based bank, they're dealing with phone calls and possibly a few days' wait for a replacement card and checks. That may be OK if the kid is at home and doesn't have much in the way of spending needs, but if the kid is off at college they'd need to have another payment method which is a pain. Remember, kids generally cannot have credit cards in their own name in the absence of any W-2 income....not like the good ol' days when they hand them out to any college kid with a pulse.
I know this because it happened to my oldest when she was off at school. She had an Alliant Credit Union account at the time, and it literally took her ***hours** on the phone to get it all straightened out. On top of that, it took a week for her to get a replacement debit card. We switched her to a local bank shortly after that, and she has used it once or twice for replacement debit cards. Like I said, very handy in the rare case that it is needed.
Statistics: Posted by cockersx3 — Sun Sep 29, 2024 8:22 pm — Replies 14 — Views 657