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Instead of getting your child a credit card, think about getting him or her a checking account. Then you can get a debit card. These cards work the same as a credit card and can be used for purchases. It can also be used to get cash from ATMs. However, if your child tries to spend more than is in the checking account the charge will be declined just as a bad check will bounce. On a brighter note if your child uses the debit card sensibly this would help him or her establish good credit.
Help them develop a budget
Do not stop with helping your child develop good habits with credit. You might want to sit down at the start of the year and help them develop a rough budget. Get out a piece of paper and draw a vertical line down the middle. On the left hand or income side right down how much your child will be receiving each month. Then ask him or her to estimate their expenses. This should include the cost of books, recreation, gas, clothes, eating out and so forth. This should give your child a good idea of how much they could spend in these categories. At least, without getting into trouble financially.
Even if your child doesn’t guess the expenses correctly, which will most likely be the case, that is okay. He or she will at least, have a starting point to build on. However, never forget that no matter how mature your teen might seem in some matters he or she is still a rank amateur when it comes to managing money and you can expect that there will be issues.
Don't be an enabler
If your kid is typical mistakes will be made. To help your child learn to use credit sensibly and manage their own finances, you have to let them learn. This means not bailing them out when they've reached the card's limit or overspent the money on their secured card. Instead of enabling them, you might suggest they get a part-time job. That way, they can earn extra money that could be used to pay down the card's balance. These lessons can be painful but less costly if they learn them when they are young. This way they will have a much easier time with their personal finances in later life.