Financial habits are established early in life, and when it comes to teens and money the issue is particularly important. Teenagers have a few short years to prepare for college before being on their own.
Since most school systems don't offer courses on money management, teenagers learn the majority of financial habits from their parents. Developing financial literacy is as important as any other subject in school, and it's up to parents to get kids on the right track. Teens and money don't have to be a bad combination as long as they receive some basic banking tips.
Find a Free Checking Account
Although they're a bit harder to find, many banks still offer free checking accounts. Starting at age 14, teenagers can set up their own checking account. Look for an account with no monthly fees or minimum balance requirements. A free checking account geared specifically towards minors is ideal. Banks offer these types of accounts in the hopes of retaining kids as client when they grow older, so take advantage of the savings now.
Teenagers can begin managing their own money from allowances, earnings, or other sources. Many teens begin working during high school, so this is an excellent time to teach good money habits. The majority of banks waive monthly fees with direct deposit, which is ideal if your child has a part time job.
Some Other Helpful Tips to Encourage Good Financial Habits:
- Encourage your teen to work part time if their grades won't suffer. Earning money really helps teach them about money. As cheesy as it sounds, the value of a dollar is best taught by earning a paycheck.
- Set a good example for financial habits. Teenagers are watching and learning from you.
- Don't give in to all requests or demands for money. Instant gratification is one huge problem for many adults with money problems.
- Do open a checking and savings account for them. Early money management skills are important.
- Encourage teenagers to read about finances, so they understand how money works.
- Hold them accountable. Don't always be so quick to bail out kids when they overspend. It's important to let teenagers see the consequences of not budgeting properly while they're still young.
Following some of these tips will help you educate your teens about money. They probably won't thank you for it now, but they certainly will later.