How to Introduce Your Teenager to Banking
It’s never too early to begin teaching your kids about money and finances. While the banking question is one that might not arise until your kids are teens, the education teenagers need about managing their money today is wholly different from the one you may have received when you opened your first account.
Instead of lessons about writing checks, recording checks, and reconciling balances when statements arrived in the mail, today’s teens need to learn about online banking, mobile banking, online bill pay, overdrafts, and more. Before that, though, they need to learn how to choose a financial institution that will meet their needs.
These are a few valuable lessons to share when introducing your teenager to managing their money in the modern world.
Explain the Different Types of Financial Institutions
Each financial institution has something different to offer. Large, nationwide banks dominated banking for so long due to the convenience of a branch location on every corner. However, with the switch to online and mobile banking, this benefit has been dramatically reduced. Nowadays, checking balances, transferring money, depositing checks, and paying bills can be accomplished anywhere with a few simple clicks.
Credit unions differ significantly from large banks because they are not-for-profit financial institutions. More community focused, they return any income they generate back to members in form of lower loan rates, higher savings yields, and lower or eliminated fees.
Most credit unions also offer checking accounts for teens that often require the parents to be part of the account. This feature will enable you to help your child learn the ins and outs of their first account, whether it is for depositing paychecks from a part-time job or simply teaching them how to manage their money responsibly.
Show Them the Ease of Online Banking
Teens need to learn more than how to swipe cards for transactions or ATM withdrawals. They need to understand how to manage their accounts. Monitoring transactions, reconciling expenses, and learning how much to save, can be done so easily through online and mobile banking. They can even deposit a check in mobile banking instead of going to the financial institution.
Check out this video tutorial on how to view transaction history within CAMPUS Online Banking.
Stress the Importance of Keeping Up with Balances
One of the most important lessons to teach teens is to keep up with their balances and check them regularly to make sure their account balance matches their numbers. If the two do not match, they need to go back through their transaction history to find out why.
Remind your teenager that many things could affect that balance, causing a difference between their balances and their financial institution’s, including:
- Gas debits
- Restaurant debits
- Any business that generally receives tips
Some convenience stores, gas stations, restaurants, and delivery services place a hold on your debit card for more than you spent. With restaurants, it’s about accounting for a tip. With gas stations, it’s about reserving enough for a full tank of gas. In some cases, they will hold up to $100. The extra withholding will “fall off” within a few days, but it can skew the balance for several days until the original charge clears.
Also, each financial institution processes payments differently. If your teen makes a purchase after school with their debit card, the transaction may not show up on their account until the next morning. It’s important to remind your teenager to keep receipts or track all their expenses to prevent accidentally overspending.
Impress Upon Them the Importance of Security
From personal identification (PIN) numbers to account information, you must explain to your teenager that they should never share these numbers with anyone. Keeping them secure is key to maintaining security for their accounts and preventing someone from wiping out their funds.
Learn More about the Rising Star Checking Account
CAMPUS has designed a checking account specifically for our Rising Stars, ages 13-17 1 . Rising Stars can manage their finances with freedom and convenience – and in style! Your teenager can choose from one of our four debit card designs 4 . Plus, jump start their balance with a $100 cash bonus when you open the account 5 . Open a Rising Star Checking Account online, today!
By Campus USA at 13 Apr 2020, 13:51 PM