7/04/2005

Advice from Nashville's leading Financial Aid Advisor Dave Ramsey

 
Dave Says
By Dave Ramsey
Author of:
Financial Peace and
The Total Money Makeover

"Checking account and debit for daughter?"

Dear Dave,

I’m a single father with a 14-year-old daughter. My wife passed away a few years ago. I want to raise my daughter to avoid the mistakes I’ve made financially. I’ve done just about everything you recommend to people not to do with money. 

I’m wondering if I should get my daughter a checking account with a debit card attached to it. I’d like for her to learn how to be responsible with money. 

Paul in Louisville, KY



Dear Paul,

Getting your daughter a checking account with a debit card is alright. However, I suggest you wait a year and let her deal solely with cold, hard cash for that period. In fact, I’d have her create four envelopes to help control her money. She should create one envelope each for “giving,” “saving,” “entertainment spending” and “other spending”. Anytime she gets some money, she can divide it into each of the categories. Then, when she’s had several months of dealing with cash and is comfortable with it, you and she can go open up a checking account for her. The problem with going straight to a checking account is that all of the money is lumped in the account together. There is no division among giving, saving and spending. In that situation, a checking account simply becomes a way of spending everything she has and you don’t want to set up that message in her mind.

Also, when you do move to a checking account you’ll want to make sure that you work with her every month in balancing her checkbook. Sit down with her monthly, teaching her at first to balance the checkbook and then, after a couple of months, watching her as she does it. This will re-enforce the necessity for her to do this regularly as well as assure you that she’s learning the proper way to take care of her checking account.

-Dave
 

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