You Can Help Your Teen Effectively Manage Their Money by Opening a Bank Account Once They Get Their First Job
Did your teen just land their first job? That’s exciting. While this is an important milestone, it should immediately be followed by another milestone – opening their first bank account.
Teen banking provides you with a wonderful opportunity to share your knowledge of good financial habits that will help your teenager effectively manage their money. A skill they will have for a lifetime.
A bank account for your teenager not only keeps earnings safe; it provides a means of allowing your teen to track what they make, what they spend, and to budget accordingly. It allows your child to succeed in financial management and to achieve higher levels of financial success in the future.
Teen Banking Requirements and Features
When you set out with your teen to open up their first bank account, you will discover that the financial institution has both standard requirements and special features associated with the accounts offered for your child’s age group.
For example, your teen may be required to place and keep a certain amount in the bank. These are requirements. They may have access to online or mobile banking, be issued a debit card, or make interest on the account – these are features.
In nearly all cases, you will be required to open the account jointly – unless your teen is either 18 or 21, depending on what your state considers to be a “legal adult”.
Knowledge – Share the Wealth
As an adult, you have a wealth of information on financial management. Once the account is up and going, it is time to share that information with your child.
Start with account-specific information, such as how to record bank transactions in the registry, how to review statements, and identifying the “current balance” and what is referred to as the “available balance”.
Review how to safely utilize ATMs, how to use a drive-thru teller, how to order checks and similar topics. You may then move on to more advanced topics – such as direct deposit and setting the account up to automatically take out for certain bills.
Integrate Savings into the Conversation
Once your child has their first job and their first checking account, it is time to integrate a savings account into the picture. You should then encourage them to take out a certain percentage of their earnings – directly from their checking deposit – and have that amount transferred over to their savings account for emergencies and future financial goals.
Take this time to explain interest and how it compounds. Your teen is sure to be thrilled to discover that their money can make even more money.
Let Us Help
If you are ready to introduce your child to the world of banking, we here at Somerville Bank would love to help. Simply visit one of our many locations with your teen and one of our account specialists will help in walking you through the set-up process. They can also assist in explaining requirements, features, and creating a savings account, too!
Click HERE to obtain the addresses of our locations.
Somerville Bank has 8 Locations