Uh Oh. The Bank Called and Left a Message.
December 10, 2010
I came home from work recently and there was a message on the phone from the bank. I will call this bank, which is a GREAT bank, the Friendly Bank. Friendly Bank’s COLLECTIONS DEPARTMENT left a message on our voice mail. I immediately called my husband, since he manages the family’s finances.
Wonderful husband called the bank and went online to check the accounts. And he figured out that it was a problem with our daughter’s checking account. But because he is not on the account, he couldn’t get to the bottom of it. And good thing, since that is clearly my daughter’s responsibility.
I spoke to my daughter when she got home and told her there was a problem with the bank and she needed to call and find out what was going on. You all know that this is one of the greatest benefits of teaching kids to manage their money – they also learn to make phone calls and interact with customer service representatives which is not always an easy or comfortable process. I think that this is an important skill to teach our kids before they leave our homes and move on to adulthood.
My daughter called and found out that she had bounced a check. The Friendly Bank paid the check for her anyway, because of our family’s solid relationship with this smaller, local bank. But she needed to make the bank whole and she also needed to pay the charge of $25 which the bank charged for the service.
The first question my daughter and I asked each other was, “How did you bounce a check?” We both are to blame. I realize that I have NOT trained my daughter well in matters related to checking accounts. And she has not taken all of the responsibility she should in managing her account.
You, dear readers, will benefit from this lesson over the next few blog posts. We will get into checking accounts and how to teach them to your kids. It’s one of the later lessons in teaching your kids about personal finance.
More to come.
Justine
Fourteen Days until France
August 11, 2009
Hannah, my daughter, leaves in fourteen days to study abroad in France for a year.
Hannah will be an Ambassador with the Rotary Youth Exchange. If you want to see a world, and you are in high school or would like to do a gap year, I highly recommend this program.
Hannah is getting ready to leave. Besides all of the packing she needs to do and the PowerPoint presentation that she needs to complete, Hannah is putting her money matters in order.
Anyone with experience in managing their own money and traveling abroad knows that you MUST call your bank(s) if you plan on using your accounts in any form or fashion when you are overseas. Otherwise, if you try to use that credit card or that debit card, your bank will likely not approve your impending transaction because they will take all of the precautions they can to protect themselves and assume that your card has been stolen, because they don’t have the correct information.
So if you want to use your accounts while overseas, it is best to tell your banks that you will be overseas and that you may use your accounts.
Hannah has decided that she will open an account with a bank in France. Hannah will take euros with her in order to open the account. But as a backup, Hannah will take her debit card for her checking account here in the States, just as a precaution for emergency funds. So Hannah called her bank yesterday to advice them that she would be traveling abroad and that she wants full unfettered access to her accounts while she is abroad.
Now, you know me. I’ve got a fifteen-year-old who manages her money without much counseling from me anymore. I’ve taught her a lot and now she just needs to ask me questions from time to time.
But this time, I asked her questions. I asked her how the call went. She says it went just fine. I believe her. And if it didn’t, well, it can get fixed later, right? I’m not going anywhere and I am always willing to help kids learn about money.
Justine
Hannah’s spending money for two weeks in France.
March 19, 2009
Hannah is going to France in a few weeks. She will be an exchange student living in French families’ homes for two weeks.
Hannah needs spending money while in France. Hannah has her own money – she works and gets an allowance, so she has money to spend in France. Hannah’s father and I are not giving her any spending money. We paid for three-quarters of the cost of the trip. We required Hannah to pay for one-quarter of the trip.
But David and I WILL give Hannah money for the meals that are not covered by the cost of the trip. We believe that as Hannah’s parents, we should pay for her reasonable cost of food, even if she is on an educational exchange trip.
So we’ve asked Hannah to write a detailed request for spending money for food. Hannah has determined that she would like that money in her checking account so she can access her food money as cash from an ATM machine while in France. We are amenable to that, but Hannah needs to spell out the request. We will advance her the cash prior to the trip, and then interview her when she gets home to make sure that what we gave her approximated her actual cost of meals while in France.
I think that works.
Justine
Calling the banks for Hannah’s overseas exchange trip.
March 18, 2009
Hannah’s trip to France for spring break is coming together.
Hannah called her credit card company to let it know that she was going to be in France for two weeks. Hannah didn’t want her use of her card restricted while she was there. And that can happen if the credit card company sees activity in France that it didn’t know might occur.
So Hannah managed that potential outcome by calling Citicards, her credit card company. The agent let Hannah manage that call and those tasks on her own, without my help.
Then Hannah called her bank that holds her checking account and debit card. That didn’t go as well. Hannah banks with a mid-sized community bank. The bank can be very nice, but it isn’t as sophisticated as the larger banks. So when Hannah called to tell them that she would be traveling to France and using her debit card while in France, they wouldn’t talk to her. They had to talk to me.
That’s too bad. Kids need to be able to manage their own checking accounts and debit cards.
It’s funny that I have some friends who let their teens have a debit card but not a credit card. And then we see that, for Hannah, having the credit card is more of an exercise in being able to manage her own affairs independently than having a debit card. That strikes me as odd.
But Hannah made the calls and she is ready, financially, for her trip. Well, almost. More later….
Justine
Paying credit cards with a check – Part 2 – Hannah
March 5, 2009
Yesterday we started into the topic of how my kids actually pay their credit card bills. The specific payment mechanism.
I explained that we use our various checking accounts. I explained how Jon, who does not have his own checking account, uses the parents’ checking account to pay his credit card and, in turn, pays us cash for the charges for which he is directly responsible.
Our process is different for Hannah. Hannah finally got a checking account during the past year. She got it through our community bank that we have hired. Hannah got to pick out her own checks. That was the most fun. Every time Hannah opens her checkbook and sees her pink Hello Kitty checks, she smiles and says, “I love having my own checking account.” She is still such a kid. (PS, those checks were more expensive than the plain ones and Hannah paid for them with her own money….)
So Hannah can pay for her charges on her credit card with her own checking account.
After Hannah audits her credit card bill and segments the charges to those for which she is responsible and those for which I am responsible, she writes her own check for her charges and then she writes a check from my account for my charges.
I get this question a LOT from teens. Can you really send in two different checks for your payment on your credit card bill?
Yes, you can!
We’ve done it and it works. In fact, I think you could send in as many checks as you would like. Your credit card company will be happy to take all of the money that you want to send them.
So each month, Hannah sends in two checks with her credit card statement stub in order to make her payment, in full, on her credit card. One is the plain check from my checking account and one is a cute, pink Hello Kitty check to cover her charges on her card. The whole thing works very smoothly.
Justine
Paying the credit card by writing a check.
March 4, 2009
OK, I’ve got teen readers breathing down my neck. They want to know how the kids’ credit card bills get paid in our household. It’s a very legitimate question. So let’s get at it.
First, let’s talk about checking accounts. I can’t really get my hands around how old one should be when they get a checking account. I know that we have tried to get checking accounts for Hannah and have been put off by the banks. Hannah finally did get a checking account when she turned fifteen years old. So, now, Hannah has a checking account and she can pay her credit card out of her own checking account.
But before that, Hannah had a credit card and the credit card had to get paid with a check, not with cash, obviously. So the way we do it in our family is that Jonathan pays his credit card each month by writing a check out of David’s and my joint checking account, paying us back in cash for expenses that are his and having us pay directly for the expenses that are ours.
In general, this works really well.
Now, you want specific examples you say? Alrighty then.
Jon is thirteen years old. He has had a credit card for a year. Jon does not have a checking account. So when Jon’s credit card statement comes in each month, he breaks the charges on that statement down to HIS charges and my charges. Let’s say that he went to a movie. He also bought popcorn. He went to the grocery store for me. He went to Wendy’s for lunch. And he went to the mall and bought a trinket there.
In our family, the parents pay for each kid to see one movie per month. So that expense is mine. But the food for the movie is Jon’s expense. The charges at the grocery store are mine, because Jon was acting as my agent and making the purchase for me. The lunch at Wendy’s is my expense, because it was a stop on a Boy Scout trip and I pay for those meals. But the trinket at the mall is his expense.
For Jon’s payment to the credit card company, he writes a check for the entire amount of the statement out of my checking account. And we’ve talked about the fact that I make my kids write those checks. But then Jon gives me cash for the purchases that are his responsibility: the popcorn and the trinket at the mall.
Got it?
Justine
Finding the new checks
January 28, 2009
Max was writing another check this morning. He had to write a check to our church for $8 for a Bingo Blast night. Cute.
Max wrote a check. But then I heard him ripping it up.
Me: “Whatcha doin’ Max?”
Max: “I am ripping up the check.”
Pause.
Max: “I made a small mistake.”
Me: “Oh.”
Max is realizing when he makes errors on a check and can move through the problem. He knows he has to destroy the check and start again.
But then there was a problem.
Max: “Mom, I used the last check.”
I explained to Max that he needed to find the box of checks and put in the next pad of checks into the checkbook.
Now, my husband manages our checking account and all of the paraphernalia around it. And my husband ain’t the most organized guy in the world. Max couldn’t find the box of checks, and wanted me to help him. I told him that he needed to get his dad. No intermediary should be involved in that conversation.
Max and his dad found the checks. Max noticed, however, that the next check did not start in the right numerical order. This is something that I coached Max on before he got his dad.
Max: “Dad, the last check was #150 and this is number #176. We need to start with check #151.
David: “Oh. Hm.”
David and Max found the correct pad of checks, which had come out of the box and was sitting loose in the drawer. I pointed out to Max that this is an example of “neatness counts” and he nodded and moved along.
Max inserted the pad of checks and wrote check number #152. He pointed out that #151 was missing and I told him how that probably happened.
Max: “But I keep using the same register, right?”
Me: “Yes, Max.”
Little tasks. Important lessons.
Justine
Self-Advocation: Steve Yoder and his son, Isaac, talk about kids learning how to manage their money
December 15, 2008
I’ve found a new column at the Wall Street Journal and it is a good one. Steve Yoder and his son, Isaac, talk about Isaac’s lessons in learning about money. The two of them write the column together, but in two parts, each giving his own perspective of the experience or lesson at hand. It is a fantastic column, because we hear from both the teen and the parent.
Hearing from the kids as they learn about money is one of the most invigorating and motivating outcomes of teaching kids about money. I get great pleasure from hearing about the impact of learning about money from the teenagers themselves. They love learning about money and they love the interaction they get from their parents in the process.
The column from November 28th (http://online.wsj.com/article/SB122801452508966843.html), in the links, at right (titled If Dad Can Do It Himself, Maybe He Shouldn’t), talks about Steve’s awakening to the fact that self-advocation is a terrific outcome from teaching our kids about money. At the end of the column, Steve notes that there are probably lots of other areas he should explore with his son, including credit cards.
Don’t worry, I’ve been in touch with Steve.
Justine
Teaching your kid how to write a check
November 20, 2008
I guess there could be a question as to how to fill out a check, right? You want to teach your kids, but you want to teach them right.
Here is a cute, interactive website that I found on how to write a check. This is a better site for your little, non-teens: http://www.thebeehive.org/Templates/Money/Level3NoRight.aspx?PageId=1.194.350.360.999&gclid=COaoo5K895YCFQZinAodVSdiYQ
Here is a more adult-like site to help your kids learn how to write a check: http://www.ehow.com/how_567_write-check.html
I think neither of these site are that thorough, though. For example, I was taught that when you fill out the Pay to the Order line or the Amount line, that you should put a line to fill in the remainder of the line after you write your instructions. This helps to keep someone from altering the check, and thus helps to reduce check fraud.
Also, one of the sites comments that maybe we don’t need to write checks anymore. But since we are all parents and kids, we all know that we still need to write the occasional check to our schools and to our sports teams and typically to our dance schools and our piano teachers. The whole world has NOT gone digital, and as one of my investment banking clients who helps its customers make payments says, we will NEVER become fully digital. At least not for a very, very long time.
So it is important for your kid to know how to write a check. If they are not able to write a check, then they likely are not diverse enough in their financial skills.
Plus, it is another fun thing to teach your kids so that they can be the self-sufficient adults you want them to be.
Justine
Let your kid write the checks!
November 19, 2008
We have a little habit that we developed years ago in our household. It think it has been for about four years now. I wish I had started earlier. We make our kids write the checks when they need one.
It started when Max was entering the first grade and needed to write the annual check for the PTA dues to the school. Max has always been a little rascal but this one was really cute. Max wanted to be grown up so he wrote the check himself. It was adorable and totally illegible. (That was when we started figuring out that we had a little monster on our hands.)
But then it dawned on me. Why am I the one to write all these checks? Shouldn’t my children be learning how to write out a check? Shouldn’t I be reducing my workload in the house as my children grow up?
My husband and I had seen that many young people who we encountered, including the au pairs who came live with us, had no idea how to write a check. It was so sad that I was teaching 18 and 19 year old young adults how to write a check. I really didn’t want my kids to be in such a spot of being so unknowledgeable. So I had to change that by teaching them how to write checks.
We all know that there are great particularities to how one is supposed to write a check. So go ahead and teach your children how to write them. And let them practice every time they need a check.
Here is how we did it: I decided that when one of my kids need a check, they should write it themselves. We’ve been doing this for so long, that it has become quite automatic. The kids know where the checkbook is kept – in the middle drawer of the desk in the kitchen. (That is the Money Drawer – more on that later.) The kid writes the check and comes to me for the signature, which, of course, must be mine, not theirs. It IS my checking account, for goodness sakes! But I don’t sign till I’ve seen that the check has been properly filled out, with the memo line completed and with all of the documentation in the check register. Then, basically as a stamp of approval of the kid’s work, I sign the check. If the requisite information is not in the register, I don’t sign the check. If the amount of the check, written out in long-hand, is incomplete, I don’t sign the check. I don’t sign the check until the check and the supporting documentation is correctly completed.
And believe me, to this day, I am still teaching my kids how to fill out a check completely right, every time.
This process of teaching kids about money is a long, drawn-out one!
Many years of practice allow your kids to be very confident when it comes to writing a check. It becomes second nature to them. And that is what you want before they leave your house!
Justine
