It's never too soon to teach your teens about finances. Teaching your teens to be money savvy when they are young can help them grow to be mature, responsible young adults that are wise about how they make their financial decisions. So what do you need to teach your teens and how do you do it? Below, you will find some information that will help you teach your teen.
Helping your teen open their own savings account online is a great first step. Some financial institutions offer special savings accounts for teenagers that provides them with better incentives, like higher interest rates, than traditional savings accounts.
Having the account online will allow you and your teen to monitor the money going in, going out and the interest that is being paid on the sum of money in the account. This savings account can help your teen acquire a line of credit when the time comes to buy a car or head off to college.
Checking accounts are difficult to maintain even for many adults. Maintaining a positive balance and not bouncing the account requires careful monitoring and calculations. Having an online checking account can help reduce the chances of bouncing the account. The online account gives you and your teen the ability to monitor transactions as they happen and track checks that are out waiting to be processed. This makes it much easier to know if there is enough funds in the account to cover the outstanding checks to prevent the overdraft fees.
Set a Budget
Help your teen calculate how much they have coming in each month and how much they have going out. Work with your teen to create a budget that will help them stay within the bounds of their income limits and to set some aside for a savings account. Learning to save now will help continue the process of saving when they are out on their own and preparing to invest in a home for their future family.
Credit cards are fairly easy to get these days. Make sure that your teen understands how credit cards work and how the offers that the credit card companies send out work. Yes, establishing credit for the future is very important, but make sure that your teen understands the consequences of opening lines of credit and making purchases with those credit cards.
Take some time to look into the different online checking and savings account options. Then, work with your teen to come up with a good plan to begin developing financial security and responsibility for the future.
For an online banking account, contact a financial institution such as TruePartner Credit Union.