Banking is considered an essential life skill and teen checking accounts can help. If you are the parent or guardian of a teenager, the time to get started is now.
In a recent international-based study, a total of 48,000 different 15-year-old teenagers were found to struggle with the most basic concepts associated with money. Out of all that were evaluated, only about 12% were considered to have a high level of financial-based literacy.
This research confirms that most of today’s youth lack confidence and knowledge of finances. The great news is, it is never too early or too late to learn.
Opening a bank account is a highly productive method for exploring important financial concepts such as earning money, saving money, budgeting, spending money, and saving for future endeavors.
While it is true that most teenagers are focused on the concepts of “earning” and “spending”, it is critical that we also place a special emphasis on money management.
A teen checking account provides a hands-on experience that will help with that concept. In taking the step of opening a bank account today, you are helping a child prepare for the financial livelihood that they will experience for all of their tomorrows.
Features of a Teen Checking Account
When you and your teen decide it is time to focus on opening a bank account, you will need to research the features associated with the options that are available. You should start by reviewing the minimum amount to open the account and the balance that is required to keep the account open.
Then, you should determine how much interest is offered on the account, ATM usage and associated fees, mobile banking, and if an adult is required to be a part of the account. In most instances, banks will have several teenage accounts available that you may choose from – in the form of both savings accounts and checking accounts.
Knowledge is Power
Once the account is opened, it is time to teach your teen about monthly statements, the importance of keeping accurate financial records, paying bills with the bank account, and deposits on the account.
If the teenager is employed, they should be educated on direct deposit and the associated benefits, as well as options like automatic bill payments. You should get your teen in the habit of verifying the information on their bank statement to the financial records that they have created as they deposited and withdrew from the account.
Planning and Saving
The most important subject that should be reviewed when helping a teen with a bank account is the concept of saving.
They should learn to take a percentage of what is in the bank for emergencies and future financial goals.
They should learn about compound interest and how it will affect their balances.
If your child only has a checking account, they should be encouraged to also get a savings account so that money may be saved in a designated location.
We Can Help
If you are ready to teach your child the essential life skill of banking, we can help! Simply visit one of our many locations here at Somerville Bank for immediate assistance in taking the first step to your child’s financial livelihood: https://somervillebank.net/locations/