Friday, 10 July 2020

High school is a time when young people are gaining skills they need to become successful adults. 

Since managing money is a very important life skill, it can make a lot of sense for high school students to have checking accounts. Here are some reasons why:

They can learn how a checking account works

Chances are most American high school students will have a checking account someday. Why not start them out early when they can learn under the watchful eye of their parents?

As most of us know, managing a checking account isn't a simple task. There are countless ways to mismanage a checking account, and the fallout can be costly. If a young person can learn to manage an account with the guidance of a parent or other adult, they can hopefully develop good habits that will help them become responsible money managers in the future.

The truth is, high school kids are already spending a lot of money. It's estimated young people between the ages of 16 and 19* account for nearly $60 billion in direct spending right now. And Generation Z is projected to wield massive purchasing power for years to come. It seems wise to help these kids develop solid money management skills early on.

They can learn how to track expenses

If kids are spending cash, it's nearly impossible to know where the money is going. Even payment apps don't provide the detailed information a checking account does.

By having them use a debit card linked to their checking account, you will have a better idea of where your kids' money is going—and they will, too. This presents a great learning opportunity. If your teen can't figure out why she doesn't have any money in her account, you can sit down and go through her expenses line by line. The key is to help teens see where their money is going and where they can cut back.

You can keep an eye on them

Today's checking accounts come with powerful tools that make monitoring spending easy. As a joint owner on your child's account, you will have access to his or her online banking, where you can see the account balance, transactions, deposits, and much more. You can also set up alerts to inform you when the account balance is low or when large purchases are made.

This insight can help you monitor the account to avoid overdrafts and other charges, and also give you the information you need to help your child manage their account better.

They can learn how to track expenses

Today's checking accounts come with powerful tools that make monitoring spending easy. As a joint owner on your child's account, you will have access to his or her online banking, where you can see the account balance, transactions, deposits, and much more. You can also set up alerts to inform you when the account balance is low or when large purchases are made.

This insight can help you monitor the account to avoid overdrafts and other charges, and also give you the information you need to help your child manage their account better.

They can learn to prioritize and make choices

As adults, we make financial choices every day. Do we go to a restaurant, or save money by eating at home? Do we take a vacation, or pay down a credit card balance? But when kids aren't spending their own money and have what seems like an unlimited supply, they aren't necessarily forced to be as discerning with their choices.

By having them manage their own checking account, they will learn to prioritize and make smart decisions. Do they want to put gas in their car, or splurge on new pair of shoes? When it's their money—and they face the consequences of their spending—they may make very different choices about how, where, and when they spend their cash.

Ideally, they will find managing their money wisely can give them a sense of accomplishment. Watching your bank balance grow as you work more hours or cut back on spending can be rewarding. And this positive experience can help them develop good habits that could last a lifetime.

Opening a checking account with your student

First, it's important to find the right account. Your teen probably doesn't need to earn interest on their balance and you certainly don't want to pay unnecessary fees. Most banks offer student checking accounts with minimal or no fees. These typically include a debit card, online and mobile banking, and few other features.

You will need to be a joint account holder in order to have access to your teen's account. If your child is under 16*, he cannot open an account by himself—you will need to accompany them in that process. Regardless, in order to monitor the account and help your child learn good habits, a joint account is probably the best route.

It's a good idea to consider overdraft protection for the account as well. There are several ways to provide overdraft protection and it could give you some peace of mind—and save money, too.

Learning money skills today can ensure a brighter tomorrow

When it comes to something as complicated as managing money, the best way to learn is by doing. Giving students the opportunity to manage a checking account—with your help—can allow them to gain valuable skills they can use for the rest of their lives.

 


*The BBVA Free Checking Account is available to anyone over the age of 18 (19 in Alabama)

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