They grow up fast, right? This is the summer your kid is getting their first job.That first paycheck your teenager earns seems like absolute gold to them. They worked and earned it. Now, it is up to you to teach them how to use that money wisely. Most teens have plans for their first check, and it can be a good thing to let them spend it as they would like to. However, this is also an important time to talk about some key topics regarding managing their money now and in the future.
Open a Savings and Checking Account
A savings and checking account is needed by the time they get their first job. Prior to that first job, you may wish to encourage your teen to have a savings account in place for any money they receive from time to time. However, with that first paycheck comes the need for a way to cash or deposit their check. With a checking account, this is a good time to teach them the responsibility of having a debit card too.
How to Use a Debit Card
Many teens see their parents swipe their card to make a purchase. However, they may not realize the process behind using it. It’s important to teach them about how to use a debit card to avoid problems later. Points to discuss include:
That debit cards withdraw funds directly from their checking account
Keeping their debit card safe at all times
How to use it properly win a PIN or signature based
Keep track of their account balance with online or mobile banking
Creating a Budget
Now that money is being earned, the wish list of purchases, like a new cell phone, is becoming real. However, now that they are driving to and from work, teens may need to pay for car insurance and fuel on the vehicle they own or use. This creates the need to budget. Making them responsible for car expenses helps teach your teen about the importance of a good budget. Go over with them:
What a budget is and how it works
How to put aside money for each expense they have
How to manage their budget throughout the month
Setting and Achieving Financial Goals
Another key area to focus on is goal setting. Teens need to learn at a young age that they cannot just buy whatever they want (you’ll want to help them to avoid mistakes related to credit cards as early as possible). Instead, teach your child how to create financial goals for big purchases and how to save for those items. Here are a few things to talk about:
Determine what their goals are, such as buying a car, paying for a trip with friends, or buying a new wardrobe before school starts
Transferring money from a checking account into savings to achieve these goals
How to track their progress and make wise spending decisions throughout the month
Taking these steps helps your teen become a financially savvy individual. They’ll want to make purchases online, use an ATM, and spend day-to-day. However, teaching them about these tasks now helps ensure they are not swiping away their money without any true plan in place. Discuss each one of these areas with your teen to ensure they know how to make wise decisions before they head off to college or out on their own.
We Have the Tools to Help Them Succeed
We have several products and services available at Genisys, including our High-Yield Youth Savings account for our members up to 18 years old. And to keep track of their accounts our online and mobile banking with Card Controls and eAlerts are a must. Let us know how we can help!