If trained early in basic financial principles (budgeting, saving, and sensible spending), and especially if allowed to open and deposit in their own savings accounts, children should be ready by age eight or nine to learn that banks do more than hold money until you need it. Granted, it’ll be several years before the kids can use checking accounts, let alone credit cards; but by grasping the concepts early on, they’ll be better prepared to handle things responsibly when the time comes—and to follow changes that occur in the interim. Use this guide if you need help explaining things:


Paper checks are rarer these days, but it’s still useful to know the procedure:

  • If not using a pre-printed personal check, write in your name and address. (Lines for written information are labeled, data-field-style.)
  • Write in the name of the person or business receiving payment.
  • Write in the date.
  • Write in the amount paid, in numerical form ($16.52).
  • Write the amount again, this time in standard spelled-out format (Sixteen and 52/100 dollars).
  • (If desired) Add a 1–3-word note, or an account-paid number, indicating the check’s purpose.
  • Sign the check.

Numbers at the bottom of preprinted checks indicate, respectively, routing number to identify the financial institution; account number; and individual check number.

Bank cards may be credit, ATM, debit, or check, though most accounts now issue a single card for the last three categories.

Credit cards are the oldest type, and the riskiest, as every purchase constitutes a high-interest bank loan. Use them thoughtlessly, and you may spend fifteen years getting out of debt. If you keep a couple cards for emergency or convenience, know all the fees linked to each account, and (however high your official limit) never let total charges exceed what you can pay off in a month or two. (If you have a legitimate expense requiring a bigger loan, you’ll save on interest by arranging a different loan type with your bank or creditor.)

ATM [Automatic Teller Machine] cards are inserted as identification when withdrawing cash from a bank account via the “robot tellers” stationed outside banks and in public venues. The issuing bank sets minimum/maximum withdrawals and (for machines not owned by the bank) transaction fees. Users need a 4-digit (usually) PIN, or Personal Identification Number, to enter into the machine as proof that the person inserting the card has legitimate right to use it.

Debit cards are used in lieu of checks for retail and service purchases. Like checks, they limit purchase value to funds available in the issuing account. (Cash withdrawals are frequently available with the transaction.) Most sales outlets require a PIN, and often other identification, to confirm the card’s ownership.

Check cards are, effectively, debit cards that function like credit cards, and are quickly replacing the former for general use. Backed by major credit card companies, check cards can be used for account-withdrawal purchases at almost any outlet, unlike traditional debit cards that were often restricted to places familiar with the issuing bank. Check cards, like credit cards, use signatures rather than PINs for user identification (though some places now forego even the signature).

Emphasize to youngsters that checks and cards are to be used wisely and according to budget—just as with cash.