Ok, so you’ve taught your kids about saving and spending their allowance. You’ve watched them get babysitting, dog walking, and retail jobs. You’ve modeled good financial behavior and talked to them about how your family thinks about money. Now, they’re embarking on adulthood— whether that’s going to college, joining the military, or their first job. Their financial IQ is about to become very important in their next endeavor, and it is vital to becoming an independent adult.
Save the Day.
Start by giving your kids the scoop on savings accounts. As the name implies, this account is like a sophisticated piggy bank that earns interest! Let your kids know that experts say 10% of earnings should be put into a savings account for the future. Being tech savvy, your kids will be happy to know they can opt for an online savings account, which makes it easy for them to know exactly what’s is in their account at all times through Online Banking and Mobile Banking.
Check it Out.
Next, explain what a Checking Account is all about. This kind of account is similar to a Savings Account, but can be used like cash for expenses, such as rent, food, or clothing and can be accessed by writing a check, using a debit card, or an ATM. It’s important to show them how to keep an eye on their account balances and track their spending to avoid overdraft fees or overspending. Connecting savings and checking accounts can also be a beneficial way to help them easily move 10% of their earned money into their savings to prepare for their future.
Give them Credit.
Credit Cards are a great way to teach your teens or young adults how to build credit, as well as to be financially protected in case of emergencies. Using their credit card for simple things like gas or groceries can help them build the credit they will need for things like buying a home, applying for loans, and other large purchases. It’s important they know how to be responsible with credit cards and what the costs will be if they fall into credit card debt. Let your child know that you’re always available for any financial questions they may have. It’s a lot of responsibility to have your first financial accounts but it is one of the first steps toward becoming an independent adult.