Six Things You Need to Teach Your Teen About Money
How old were you when you opened your first checking account? In today’s world of technology, contactless payments, and mobile wallets, the average age of first-time debit card users is getting younger and younger.
Back in my day (which doesn’t feel that long ago), your parents helped you open a checking account and get a debit card when you got your first job. Before that, you paid for everything with cash, and there wasn’t a need for anything else. There was no Apple Pay or Venmo. I couldn’t even press the internet button on my flip phone without being worried I would bankrupt my parents.
That was then, this is now. Thanks to modern technology advancements, a worldwide pandemic, and a coin shortage, physical cash has become a thing of the past. So what does this mean for future generations?
Simply put, it means we (parents of young impressionable teens) have to start teaching our kids how to handle money at a younger age. We have to do more than just give them a piggy bank and hope for the best. It is our job as parents to give our teenagers the tools they need in order to one day become financially stable adults in an electronic-driven world.
If you, too, are a parent of a teen or pre-teen, these are some suggestions to help you along the way.
1. Open a Student Checking Account
If your kid is 13 or older, they are eligible to have their own Student Checking account. Include them in the process, whether you are opening their account online or in person. Since they are under 18, you will be a joint owner on their account and can monitor their saving and spending as well. They will also receive their own debit card that they can use anywhere that accepts VISA.
2. Set up their Online Banking & Download the Mobile App
Help them create a login for online banking and teach them how to navigate all the different features available. If they have a phone or tablet, have them download the GCEFCU mobile app for free from the Apple or Google Play store. Practice depositing a check into their account electronically by using the Deposit Check (RDC) feature in the mobile app.
3. Teach Them How to Use Their Debit Card Safely
Contrary to what many children believe, a debit card is not a magical piece of plastic that lets you buy anything for free. Explain to your teen that they should only use their debit card at places that they trust, and only if they have enough in their checking account to cover the cost. After they use their debit card a few times, have them log into their online banking to see their transactions.
4. Create a Habit of Saving Money
Good savings habits start early and last a lifetime. If you instill the importance of saving money at a young age, chances are it will grow with them into adulthood. Teach them to pay themselves first by putting a certain percentage of any money they get into their savings account. As an extra perk, you can even transfer them an allowance for chores completed.
Another great way to teach savings is with a Dollar Up account. Every time your teen uses their debit card, the transaction amount will be rounded up to the nearest dollar, and the change deposited into a savings account. It is an easy way to show how saving just a little bit of money can go a long way.
5. Practice Safe Spending
If your teen is going to be using their debit card for online purchases it is essential that you go over safety precautions. Fraudsters steal from young people just as easily as they steal from the elderly. Make sure they know to only make purchases from secure websites, which have https at the beginning. In addition, explain that they should never give out their PIN or online banking login and password to anyone.
6. Don’t Forget to Teach the Basics
As common as debit cards are, it is still important to teach your kid the basics of managing money. Teach them how to write a check, what a routing number is, and how to fill out a deposit slip. Most importantly, educate them on the value of a creating & abiding by a budget.
Some Tips for the Parents
If you are thinking, “my kid isn’t responsible enough to have their own debit card,” you are not alone. But most people, teenagers included, are ignorant in certain areas until they have experience to help them improve. With a Student Checking account, you have full access to their account and can monitor their saving, spending, and even choose their daily limits. Plus, you can see exactly how much they spent on something (and if they owe you any change).
As always, if you ever have any financial related questions, don’t hesitate to give the credit union a call.
From one parent to another – Good luck!
Post author: Caylee Smith, CUCME
The opinions expressed on this page are for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of the article and may not reflect the views of the credit union.