The teenage years are pivotal for young people, since they will soon become adults and will have to learn many important things about life. One of these things is how to properly manage money. The sooner your child understands finances and how to manage checking and savings, the more prepared they will be when they have a career and income. One way teens can learn about money management is by having their own checking account. Read on for some helpful tips to prepare them.
Ask your teenager if they're ready for their own checking account. Then, make an appointment to go to the bank together and set one up. Sit down with them and go over the basics of balancing a bank account, and teach them the importance of properly monitoring their money. A few lessons in money management can go a long way to better understanding credits and debits as well as spending and saving.
Monitor the Account
While you want your teenager to learn how to become independent with their money, it's recommended that you monitor their spending so they don't overdraw. Explain to them that banks will charge hefty fees for overdrafts, and that it's important to make sure they do not spend more than they have. You should have access to their account so you can keep an eye on how their money is being spent. If you feel they're being wasteful, now is the time to have a serious discussion about spending habits and keeping track of their money.
Explain Safety and Security
In today's world, bank accounts are more susceptible than ever to hacking or identity theft. Make sure your teen understands the importance of creating a strong password, and that they should never share that information with anyone else. Help them to recognize emails that could potentially be fraudulent, and tell them to never click on a link other than the bank's secure website. Educating teens about bank fraud can help them and their money stay protected.
Earning and Saving
Not all teenagers have a job, but there are ways they can earn their own money. Whether it's selling their unused items online or doing chores around the house for an allowance, letting them earn their own money can help them understand the real value of money and income. Explain to them how saving up for the things they really want can be a very rewarding experience. By having a bank and checking account, they can watch their money grow and will have a better appreciation for hard work.