It’s never too early to teach your children smart financial habits that will serve them well into adulthood. Introducing your teen to banking early will help them develop healthy money habits like saving, spending within their means and avoiding overdrafts. Here are the key areas to cover in your conversation about banking with your teen.

Teaching Good Financial Habits

The sooner your teen learns good financial habits, the easier it will be for them to manage money effectively as an adult. Start by showing them the importance of saving. Help your teen set a savings goal, whether it’s for a new gaming system, a bicycle or their first car. Encourage them to set aside a percentage of their money — 10% is a great starting point — to build their savings.

A checking account is also an essential tool for managing everyday spending. Teens often have plenty of things they want but tight budgets. Help your teen understand the difference between a need and a want, and show them how managing their money carefully can provide security in the future.

Once your teen opens a checking account, they’ll need to monitor their balance and track their spending regularly. This habit will help them avoid overdrafts, negative balances or not having enough funds to cover purchases.

Choosing the Right Bank Account for Your Teen

Your teen’s first bank account can teach them essential money management skills. Many banks and credit unions offer accounts specifically designed for youth.

Before opening an account, check with your bank or credit union for any specific requirements. Some banks require a parent to be a co-signer, while others set an age limit, such as 16, to open an account. Many accounts require a small deposit to open, but others have low or no balance requirements. Avoid accounts that charge monthly fees if your teen’s balance falls below a certain amount.

Consider these features when choosing an account for your teen:

• Spending Limits: Some banks impose daily spending limits, or you may be able to set them as a parent.
• Parental Restrictions: Look for accounts that allow you to set limits on withdrawals, deposits or transfers.
• Mobile and Text Banking. Help your teen start learning how to manage their money from their phone. Look for accounts with apps that send notifications about balance updates and transactions.
• Educational Resources Some banks and credit unions offer resources to help your teen build their financial knowledge.
• Fees: Choose accounts with no monthly maintenance fees or minimum balance requirements, and avoid overdraft protection so your teen’s card is simply declined when there are insufficient funds.

Ready to Get Started?

Introducing your teen to banking early and helping them open a checking or savings account gives them a solid foundation for managing their finances. Horizon Credit Union offers teen-friendly banking options with features that make managing money simple. Set your teen on a strong path to financial independence by helping them open an account today! Visit a branch to get started.