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What to Do?

February 1st, 2008 at 12:04 pm

We got a notice in the mail yesterday that DS#2 has overdrawn his checking account for the 2nd time in 2 weeks. DH wants the account closed out immediately since my name is also on it. Needless to say, I am not too happy about it, either, but I don't know if closing it out is the correct thing to do.

DS#2 will be 18 next month. I don't know if he can have a checking account by himself before then or if he needs an adult to be on it. He needs to learn to handle his money, but I don't want it to be at my expense either. He has always been the type of kid that flies by the seat of his pants and just goes with the flow. A good thing for all the troubles he's had, but bad financially.

And it's not that he doesn't have the money...he just forgets to deposit his paychecks!

The only thing that he really uses the account for is the automatic withdrawals that the car insurance company makes every month. He pays cash for everything else, except the one check he wrote a few weeks ago and forgot to write down!

My first thought is to make him take the paycheck he just got yesterday and make the account current and then have him give me his paycheck every week and let me take care of it, but that's not teaching him anything. He'll be moving out in June and needs to know how to do things.

Ack!!! Kids!!!

Posted in Banking | 10 Comments »

10 Responses to “What to Do?”

1. DeniseNTexas Says:
   February 1st, 2008 at 02:49 pm 1201877386
   1201877386
   What about letting him go on a cash only basis? Envelopes? It works! And it's a good way to teach about money. But since he's almost 18 it doesn't matter a lot since he can then handle it however he wants. I'd get my name off that account, though, even if that means closing it. He can survive on cash.

2. Aleta Says:
   February 1st, 2008 at 03:53 pm 1201881219
   1201881219
   You said that he only uses the account for his car insurance payment and yet he has overdrawn already twice in two weeks. Does he make 2 payments a month to the insurance company.
   
   I agree with your husband about closing the account. One time OK, but not 2 times in 2 weeks. I know as a mother that it is hard to do this, but he has to learn.
   
   I automaically thought about the envelope system as well. Maybe a little inconvenience will help him. Kids should have to prove that they can handle an account. It's not fair to you if you lose your own good name.

3. rduell Says:
   February 1st, 2008 at 04:00 pm 1201881651
   1201881651
   Aleta...he had written one check that he forgot about and that was the one that bounced first. Then the car insurance payment drew it under again.
   
   He just left to go close the account and use the paycheck he got yesterday to make up the difference. He will go to a cash only system until he's 18 and ready to do this on his own.
   
   You're right, as a mom it is hard to do this but he is definitely the type that has to learn the hard way. It's difficult to watch.

4. Aleta Says:
   February 1st, 2008 at 04:06 pm 1201881987
   1201881987
   By the way, I'm speaking of experience. In the past, I bailed out a son that I shouldn't have. Needless to say, it didn't help. Then, there's the other son, that learned and on his own did well. So, I speak from experience. Sometimes, we like to be the hindcatcher and that does more harm than good. Yes, I know that it's hard to watch, but remember he's watching what you are doing. The son I spoke about now sees the value of our having am emergency fund. So they do watch what you do and evaluate if you know what you're doing or is this another new phase that Mom and Dad are getting into. Bite your lip and sit tight .
   

5. rduell Says:
   February 1st, 2008 at 04:13 pm 1201882425
   1201882425
   I know we need to use tough love with this kid in almost every situation. It's hard for me because I feel badly about all that's happened to him in his life. This is the one that has the seizures, just got mugged, had his car totaled, etc. But coddling him isn't going to help him get his act together either. Sometimes I hate being a parent. LOL!

6. gruntina Says:
   February 1st, 2008 at 07:57 pm 1201895864
   1201895864
   This entry brought up a good point for me. I don't have children yet but this read made me realize I probably would not be able to teach my future children about Finance the way I was taught in my younger years. Checks were a common method of payments and tracking my balance in the checkbook. Now days it's different with Debit/check cards and online banking. College kids usually don’t stay at home to verify everything on their online account and would need to come up with a way to track their balance without relying on the ATM balance count which is not accurate. Gonna be interesting.

7. Lauren Says:
   February 2nd, 2008 at 03:43 am 1201923831
   1201923831
   If he's not 18 yet he has to have a custodian on the account. Could you make him just use a savings account? Does he need to be able to write checks? If he's not careful he'll get blacklisted against being able to open a checking account in this thing called ChexSystem. It's similar to a credit report but for checking accounts. The main difference is that you are either flagged or not (verses the credit system that has a scale)
   
   If you get on that list you can't open a new checking account for five years. You get on the list if the bank closes a checking account with your name on it for "cause". Overdrawing too many times, no matter the amount of the overdraft could be cause if the bank felt like it. Paying back the money won't make the mark go away. As I said, it's a flag. Also, if you are the custodian then you could get in ChexSystem too since your name is on the account. It's actually easier to get credit after a bankruptcy than a checking account after getting put into ChexSystems.
   
   I had a friend who was incorrectly reported to ChexSystem. The bank that made the mistake even fessed up and offered to confirm to anyone who asked, but it didn't matter. No one would give him a checking account because he appeared on the list and was considered too big a risk. The only one who would take him was the bank that messed him over to begin with. Scary stuff. Not something to mess around with.
   
   Good luck with it...

8. rduell Says:
   February 2nd, 2008 at 01:40 pm 1201959643
   1201959643
   Thanks for the info, Lauren! That is really good to know. He went up and closed it out himself yesterday. With it being such a small town, they didn't even charge him for either bounced check, but just covered them for him. He's really lucky. He could have had $62 in fines just from the bank, not to mention if they hadn't covered the checks.
   
   He really doesn't mean to do all this. He just forgets. I sometimes wonder if it's a result of his birth (he was oxygen deprived) and seizures. He is our smartest child as far as IQ goes. He's in the gifted program at school, but is terribly forgetful. Always has been.
   
   Right now he's operating on a cash only basis and I'm keeping the money for him since he's afraid of being mugged again. He'll be 18 in a month and a half, then he can do what he wants without me having to be on the account.

9. tiki Says:
   February 3rd, 2008 at 03:07 am 1202008062
   1202008062
   Your son sounds like a great kid. He'll figure it out! And he's lucky to have a parent like you!

10. Monica Says:
    August 21st, 2008 at 10:46 am 1219315568
    1219315568
    Thanks for the mail lauren,I think you highlight some important points about how financially savvy the young men and women of tomorrow will be.
    
    I think we should encourage them to start by opening up simple bank account packages from a young age, even if to only manage pocket money etc.
    
    I don't know about the states but in the UK there are plenty of free online saving account packages to choose from providers including but not exclusive to Barclays, Lloyds and many more.

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