Kids grow up fast. By the time your child reaches middle school, they’re likely earning money regularly whether that be from an allowance, earning good grades, completing chores, holidays and birthdays, and even a part-time job depending on their age.
Teaching your teen smart money habits, or anything really can be challenging. However, with the right motivation, your teens can learn to manage their finances.
A simple way to support your child’s financial education is by opening a checking account for your teen. Helping your teen open a checking account is a great way to set them up for a lifetime of financial success. Below are four reasons to consider opening a checking account for your teen:
Teach Basic Money Management Skills
Managing a checking account may seem like a breeze to an adult, but your child will need to learn the ropes of how to maintain their accounts. Teens will need to learn basic things, such as monitoring their spending, safeguarding their debit cards, and how to deposit, withdraw and transfer money.
Instead of having your child figure this out later in life, you can help guide them through this process while they’re still under your roof by opening a checking account for them. Together, you can explore the account’s features and services, such as Mobile Check Deposit, P2P Payments, and Card Controls.
Build Healthy Budgeting Habits
As your teen begins to recognize the value of a dollar, you can introduce some early budgeting concepts. For example, they can start to learn how to prioritize necessities over their “wants.” Having a checking account of their own provides your teen with the independence that will help them learn to budget better.
Start by talking to your child about a large purchase they want to make, like a new phone, a car, or concert tickets. Help them budget for the expenditure and think of creative ideas to earn the money for it. Seeing the balance in their checking account rise or decrease can be a powerful motivator for your teen to stick to a budget and not overspend.
Establish Financial History
While a checking account does not directly impact your child’s credit history or credit scores, your teen will benefit from keeping their account in good standing.
In the future, when your child is ready to apply for lines of credit like an auto loan or credit card, lenders will often ask for an active bank account on the credit application to confirm that your child is financially responsible.
The healthy money habits you helped instill in your teen with their checking account, will not only help them get approved for the loan but also give them a leg up on handling credit cards and paying off loans as an adult.
Develop Self Accountability
Most teens can’t wait to be an adult and want to be treated as a grown up. Being an adult involves handling expenses and saving money. A checking account can act as a stepping stone to adulthood while allowing them to make financial mistakes in a safe environment.
Many checking accounts for teens offer features like overdraft protection, monitoring features or alerts, and financial education resources. These benefits allow your teen to gain financial independence under the guidance of their parents. Teenagers are bound to make some mistakes upon opening their first checking account. As a parent, the best thing you can do is to let them learn these hard lessons now, and not years later.
Opening a checking account for your teenager may seem like a big step, but with the right account, this financial journey can be a lot less scary. Soarion’s Student Checking Account offers features and benefits perfect for 13 to 17 year olds.
