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Teen Checking Account Tips

Authored By: Community Focus FCU on 4/11/2022

Young woman with a cell phone thinking of future purchases

Teen Checking Account Tips

You may have opened a savings account for your children as a way to sock away money for college or to teach them about investing. As they grow, however, they’re going to need to learn some other money basics, and that includes managing a checking account. Starting a checking account early for teens is a key way to avoid pitfalls later as it can help learn concepts related to money and give them valuable practice in a safe environment.

Choose the right time

Look for a level of responsibility in your child rather than age. Some young people are ready for a checking account and a debit card at the age 13 and some need a little big more time. For accounts opened for teens under the age of 18 you’ll be a co-owner of the account as a parent. This gives you the ability to view the account and set up limits and restrictions. 

Set it up together

  • Walk your child through the process of depositing money earned from jobs, birthdays or allowances to the account. Place some in savings for later and some in checking for spending.
  • Remember that while your child has watched you swipe a debit card for years, he or she may not fully understand how the transaction works. Explain that a debit card connected to an account is the same as cash. Then, when your child uses a debit card, track the transaction and watch the process. Show how after the card is swiped, funds are deducted from the account. Hang on to the receipt until the transaction goes through.
  • If you have mobile deposit turned on, show them the steps involved to take advantage of this feature.
  • Teach your child the importance of never sharing account information with friends and to always use privacy measures when shopping.

Monitor activity

Once your son or daughter grasps the basics of the transaction process, make sure you set daily habits of checking their accounts. Using your smartphone app (or online banking), take 60 seconds every day to check the account balance. Many institutions, including our credit union, have a daily debit card limit for protection. In addition to checking activity online, request text alerts if the account is low or below a certain threshhold.

Make it a learning process

Some parents set up a system in which teens receive a stipend or allowance every 2 weeks, similar to a paycheck. From that amount, they need to cover gas, dining out, miscellaneous purchases and entertainment.  If they overspend in certain categories and don’t have gas money then maybe the “work overtime” or do extra chores to earn more. Or possibly they have to wait for the next “”check”.
With technology we have a lot of tools for limits and controls — you can let your teens manage their accounts with the assurance that there are checks and balances creating a safe environment.

Check out the FastTrack Teens Account at our credit union for more details. 

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