Debit, Credit, and Checks, Oh My!!!

This is a guide to teaching banking to high school students.


Step 1: What is the difference between debit, credit, checks, and cash?

  Debit: Money is deducted from your checking account. You need to have sufficient funds to cover the total amount of your purchase. You are required to enter your pin number when making a purchase. It is similar to using cash except there will be a way to track your transaction history on your bank statement and on your online bank account.

Credit: You are borrowing money that you will pay back later plus interest. You must pay your credit card statement on time to avoid additional fees. Banks offer credit cards that can be used any place that accepts credit/debit purchases. Retail stores often offer their own credit cards that can be opened and used only at that store. Explain the pros/cons of opening credit cards, the dangers of falling into debt when using credit (especially with young impressionable adults).

Some examples of Pros/Cons: Renting a car or hotel room, store discounts (still                     be aware of interest), rewards (airline points, extra discounts for spending more)

            Checks: Checks are not as common as they once were but are still relevant. Some retail stores have stopped accepting checks so you should always have a backup plan to pay for your goods. Checks leave a paper trail of your purchase, can be made out to anyone, and can be postdated. Checks are widely used to pay mortgages or rent to landlords.

            Here is a great tool to create mock checks for your student to fill out:



            Cash: Cash is always good to have on hand in case the location you are trying to make a purchase does not accept credit/debit. Small local businesses, parking garages, street markets, street food vendors, food trucks, toll bridges, yard sales, etc.

Pros: What you have is all you can spend, sometimes it prevents you from maxing your credit card.

Con: What you have is all you have, you might end up in a situation you need more money (ex: the dinner bill is more than you expected).

Step 2:

  • Where to buy envelopes and stamps? Take a trip to buy envelopes and stamps at a place of the students choosing. A grocery store, the bank, post office, an ATM, office supply store, gas station, online, etc.
  •  Teach your student how to address an envelope
  •   What bank to choose? I would tell my student it is likely they will end up signing up for the same bank as their family but it is up to them when that time comes.
  •   Can you use an ATM that is not from your bank? Yes, but explain they will be charged a fee.

Step 3: Saving Money!!!

            This has to be one of the most important steps! Save, save, save…..and save!

Saving money is extremely important because you always want to be prepared for emergencies and unexpected expenses. Some examples of reasons to save money are: learn self-control, eventually move out of parents home, an unexpected illness, loss of a job, to pay for college, books, bus passes, and vacations.

Step 4: Visit a post office

            Visiting a post office can be intimidating. I personally don’t enjoy trips to the post office, I actually would rather make a trip to the DMV. Taking a trip from a student’s home to the post office using public transportation might be good preparation for their future. Once there share with the student the services offered such as: passports, international mail, stamps, sending larger packages and paying for postage. Show them where blue collection mailboxes are close to their home also.

Step 5: Have the student fill out a mock check to pay a bill such as rent, their cell phone, internet access, college books, anything motivating to them. Take a trip to buy envelopes and stamps. Have him/her send it to themselves from the post office.

Step 6: Visit a DMV

            Does your student have a state ID card? If not, first contact student’s parents or guardian to see if they are comfortable with you helping the student get an ID card. This is done by visiting the DMV, complete form DL44 (in California), provide proof of birth date, SSN, residence, and pay a $29 fee.

Here is an attachment of this lesson to save and print for yourself:


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