As your teen transitions into adulthood, they’re experiencing many firsts, including a first job and a first paycheck. This is the perfect time for them to start managing their own financial products too. Even if they’re not 18 yet, they can still open their first checking account with your co-signature. A checking account is a crucial stepping-stone on your teen’s journey to full financial independence. Let them practice now, while still under your watchful eye, and they’ll have a clear advantage over their peers when they leave for college or start their first full-time job. Here are four strategies to help your teen use their account to the fullest.
1. Wait until your teen is ready
You know all too well that your teen is unique. Accordingly, not all teens are ready to handle a bank account at the same time. When deciding whether or not you should open one together, focus on your teen’s level of maturity and previous experiences handling cash, rather than their age or year in school. Some teens can handle a bank account at 14, while others may need an extra year or two. Either way, they’ll have plenty of time to practice money management before they move out, so don’t feel the need to rush things.
2. Let your teen manage everything (with your guidance)
Even though you’ll be a joint account holder until your teen turns 18, let them take the lead on managing their money. They should be the ones checking their balance, making ATM withdrawals and using the debit card to make purchases. This is the only way they’ll get better at it. Continue to talk with them about budgeting and responsibility. Let them know you’ll always be available if they have questions. You’ll ultimately have the final say as to how your teen manages the account, but they should still feel like they’re in control of their money.
3. Talk about fees with your teen (so they can avoid them)
The best teen checking accounts are free, meaning your teen should not have to pay any minimum balance requirements or monthly fees. Fortunately, BrightStar Credit Union’s checking account is free, no matter how old you are. However, there may be other fees your teen needs to worry about. Your teen may be charged a fee for an overdraft or using an out-of-network ATM. Go through all the checking account’s boring documents, including the fee schedule, together. Don’t hesitate to ask a BrightStar representative for help if you don’t understand something, or just need clarification.
4. Online banking is the best thing ever
Before computers and smartphones were invented, balancing your checkbook and reviewing your monthly statements were essential skills for anyone with a checking account. They’re still important, of course, but online banking has made them easier than ever. Your tech-savvy teen can easily manage their account right from their computer or smartphone, which will help them stay on budget. BrightStar has mobile apps for your phone and free online banking. Make sure you talk about online safety first, though. Banking online can be dangerous in public places, and you don’t want your teen to become a victim of identity theft.
For more money management tips for your teen please visit http://www.BrightStarU.com
Laura Edgar is a senior writer for NerdWallet, a consumer finance website that helps you with planning your financial future.