How to Introduce Your Teen to Money Management
Starting high school can be one of the most exciting times in young person’s life. It’s a chance to show your maturity and independence, and it’s an opportunity to build some pretty significant friendships.
However, high school can also be a very challenging time. From strange new teachers to strict rules set by the school administration, students have to face a load of new responsibilities every day. One of things that can really add to the pressure is the pressure to be financially responsible.
Whether your child struggles to keep up with the books or you worry about what he or she will do once they finish high school, one of the best things you can do as a parent is introduce your child to a bank account and basic money management.
Picture this situation: at the end of junior year, your son is so busy with football and studying for the SAT that he doesn’t have enough time to work and save up enough for his first year of college. You should feel assured that he’ll be fine after he gets a job as an analyst, right?
What Kind of Bank Accounts Make Sense for Teens
In this article, you’ll learn about the reasons why you should consider starting your teens with a bank account and your options for opening one. We’ve also included some tips for teaching your teens about budgeting, saving, and spending responsibly.
Tips for Opening a Bank Account for a Teen with a Minor’s Social Security Number
Set up a checking account for your teen using their Social Security number.
Allow him or her to use the account.
Set a limit on the number of withdrawals and amounts.
Use ATM/Debit cards to teach teens about budgeting.
Have your teens help you write checks.
Talk to your teens about the importance of saving, using a savings account, and credit scores.
Have your teens write budget plans.
Make them read the fine print.
Parental Guidance Builds Good Habits
Parents are always looking for ways to teach their teens good financial and organizational skills. You have probably told your teens to budget their funds, to save some of their money for a rainy day and to stay out of debt. But teaching your teens is easier than getting them to put those lessons into action. One of the best ways to ensure that your teens develop good financial skills is to work with them and help them to use the tools that are available, while at the same time encouraging them to make wise decisions when it comes to money matters.
Opening up a joint bank account with your kids is a great way of keeping them accountable for their spending. Teens are the least accountable generation that has ever been born, so even the most responsible child could make ruinous decisions if given access to the family credit card.
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What are the benefits of opening up a bank account?
To begin with, your teens will have access to a bank account with a debit card. With an online bank account, they can easily use the debit card to pay for things online, at the gas pump and at the grocery store. They’ll feel like they have the independence of a checking account.
Start Your Teen With the Right Financial Footing
Millennials and beanie babies: It’s easy to remember what you were doing when you were 15 or 20 or 25. It’s not so easy to remember what your 15-year-old was doing. Whether it’s attending their first concert, trying out their first beer, or taking on their first job, it’s normal to want to protect the wide-eyed, innocent quality of your child’s earliest years.
Let your child try out different activities and take on different roles and responsibilities over the course of their adolescence. But when it comes time for them to enter adulthood, let them enter the financial world in a way that’s secure, comfortable, and does not cause them undue stress.
What You Can Do
Finding the motivation for your also-adult child to start taking on more adult responsibilities can be difficult. So let go by giving them respect by allowing use of their first bank account.
Let your child choose how to purchase the item with their own money. But first, sit down with them and help them set an appropriate budget to create their spending plan.
Open their account with yourself as the primary co-signer and help your child manage the account responsibly.