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As a parent, you always want the best for your child, and one of the greatest gifts you can give your teenager is the ability to successfully manage their money. The first step to helping them is actually giving them a little bit of control and independence when it comes to money, and that includes having a checking account. If that seems daunting, don’t worry. We have three tips that can help you ensure they’re on the right path to responsibly managing their first checking account.
Teach Them the Basics
Before you dive in and open that first checking account, introduce them to the basic concepts. Explain that many basic checking accounts would give them a debit card. Show them how you manage your accounts, whether that’s via online banking or a mobile app. It’s important that they understand that some checking accounts come with fees and limits. They should know how to log on to their accounts, remember their password, keep their account information confidential, and stay aware of how much money is in their account at all times.
Choose the Right Financial Institution
Put some thought into where your child will begin their financial journey. Make sure the institution has products, services, and locations that can support their future. We recommend prioritizing personal service, as a younger person new to the world of finance may need some extra attention. When you and your child are ready, take them to open a checking account. By giving them the responsibility, they are more likely to feel in charge, which can help them make better decisions. Ask about what kinds of products and services they offer teenagers. As a joint account holder, you would have the ability to check in on their progress.
Monitor Their Activity
Your teenager is a minor until they reach age 18. They can use your help as they learn how to make good financial choices. They will surely slip from time to time. You can avoid overdraft fees and negative balances by closely monitoring their activity. Meet with your child regularly (perhaps weekly or monthly, depending on how often they will use their account). Having regular meetings will hold them accountable and help them understand how their habits affect their accounts. During these meetings, you might discuss spending, saving, budgeting, and eventually move into more complicated financial topics. You might also talk about their future careers, what types of jobs they might want, and what kind of income they might expect. Essentially, the conversation need not be confined to the transactions in their checking account. It can be a way to connect and talk about broader financial topics and career aspirations.
Ultimately, as long as you have a responsible teenager who is ready to keep track of their money, helping them open a checking account is a great way to monitor their spending and give them a sense of independence.