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Face Off: Should kids and teens have their own bank accounts?
- Two students debate whether opening a bank account prepares children for financial independence or sets them up to misuse their money
![Bank accounts earn interest rates, but it can also be complicated for Photo: Shutterstock](https://cdn.i-scmp.com/sites/default/files/styles/landscape/public/d8/images/canvas/2024/08/09/fb39500b-279e-4968-84f2-c2b79f70da0b_11ff998e.jpg?itok=s1wnI1SD&v=1723189215)
Each week, two readers discuss a hot topic in a parliamentary-style debate that doesn’t necessarily reflect their personal viewpoints.
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For
Sophie Li, 16, Bishop’s Stortford College
Giving kids and teens their own bank accounts can provide numerous benefits that set them up for long-term financial success. While some may argue that children are not responsible enough to manage their own money, studies have shown that having a bank account from a young age can teach valuable financial literacy skills.
A bank account gives teens financial autonomy by allowing them to make decisions about spending money within reasonable limits. This helps prepare them for the financial responsibilities they will face as adults. Instead of spending on impulsive purchases, teens will consider whether fast food or bubble tea is worthwhile. This can also boost their self-confidence and decision-making skills, instilling a sense of optimism in parents about their children’s future financial independence.
Kids and teens with bank accounts are more likely to begin saving for critical future goals. This habit of saving for the future makes them comfortable with keeping track of their finances, ultimately leading to greater financial stability.
Opening a bank account also gives children the opportunity to learn about investing. Many banks offer youth accounts that earn interest, teaching them the importance of allowing their money to grow over time. This teaches them about interest rates and the importance of establishing good credit, which can help them when they take out loans or apply for a credit card.
The bank is a safe place for them to keep money. It provides a secure environment to store their funds, so they don’t need to worry about losing them or having them stolen. Banks use security measures, like CCTVs and insurance, to protect the money in their customers’ accounts. This peace of mind enables young account holders to focus on developing their financial skills without being concerned about the safety of their funds.
In conclusion, the benefits of giving kids and teens their bank accounts far outweigh any potential disadvantages.
By providing this opportunity, the next generation is empowered to develop the money management skills they will need as adults, setting them up for long-term financial success and stability.
How to start saving money as a teenager (for your future self)
Against
Aaron Dou, 15, Hong Kong Taoist Association Tang Hin Memorial Secondary School
Many kids and teens nowadays want to have bank accounts to save their pocket money and red packets. However, young people do not need bank accounts.
Most children do not have a significant income to manage. Unlike adults, children’s income mainly comes from their parents since most are not old enough to work.
In contrast, adults get a fixed income at regular intervals. As a result, they need a bank account to handle their earnings efficiently, allowing them to take out or deposit their money whenever they want quickly.
Children do not need a bank account to repay loans or pay rent. They need some money to buy their favourite drinks, food and books. Therefore, managing a bank account is an unnecessary burden that can cause stress for them and their parents.
Moreover, as children use their names to open bank accounts, their guardians are required to help them when something is wrong with their bank accounts.
If a child forgets the password to their bank account or loses their bank card, they would have to go to a branch location with their parents to seek help. This would cause stress and inconvenience for both the child and the parents.
Some may say that it is a good idea for a child to open their own bank account since this can develop their habit of saving money and it is good for their future financial management.
However, many children are drawn to every new and shiny trend that pops up. They might be tempted to buy expensive products, new electronics or top up the accounts on their favourite games.
This could lead to a misuse of their money, rather than saving for emergencies as adults would. If they were to face problems requiring a large amount of money, they could just rely on their parents.
Thus, opening a bank account for a child does not help with the problem of wasting money. As children are so often addicted to buying things, parents should focus on reducing their pocket money and explaining the intricacies of budgeting.
Overall, opening a bank account for a child is not a good idea. Doing so would be an excuse for the child to spend more money on meaningless things, preventing them from learning the importance of wise spending.