Teens Gain Money Management Skills With Student Checking

If you have a teenager in the house that means you have a child who is a few short years from being out on their own. What skills do you want them to have when they go off to school or to start a new career?

Chances are that good money management skills are on that list.

Whether they have a part time job or just an allowance, odds are your teens have some money to manage. Before they are expected to manage large sums, it’s best they learn to manage small amounts too!

That’s why VCNB offers a Student Checking account. This account is designed to help teens learn how to manage money, keep a debit card safe and learn some financial independence.

Here are some things to know.

This account is for teens ages 14 to 17 and requires that a parent or guardian be a joint owner of the account. There is no minimum balance requirement or fees for electronic statements. The account comes with a free standard debit card.

Like all VCNB accounts, Student Checking gives the account holder access to account alerts, online and mobile banking so that your teen can learn to successfully keep track of and spend their money. They can also access over 32,000 surcharge-free ATMS nationwide through the MoneyPass® network.

Click this link to read more about this account or to get started by opening a new Student Checking account online.  

Tips For Teaching Kids Of All Ages To Save Money

We recently celebrated Teach Children To Save Month which is an excellent opportunity for parents to start talking to their kids about saving money. As their parent, you want the best for your children and one way to help them get a good start in life is by teaching the value of money and how to save it for a rainy day or for a goal. Learning to properly manage money is as important as learning to read and write but it can be hard to know where to start.

No matter your child’s age, from toddler to teenager, there are some basic principles that apply to any age.

Give Them A Way To Save – Little kids love putting money in their piggy banks. Give them a bank or maybe a clear jar so they can see their savings grow with every nickel and dime they drop in. Older kids respond better to seeing their savings grow in their mobile banking app so help them set up a savings account.

Let Them Earn Money – Older teens may have jobs while younger kids might pick up a few bucks by walking a neighbor’s dog. Even little kids can earn a little by taking on some kind of responsibility at home. Maybe you give your kids an allowance. Regardless of the source, kids needs to have access to some money of their own so they can learn how to handle it responsibly and possibly even learn from a mistake or two while they’re young.

Explain Needs Versus Wants – This can be a tough topic even for adults sometimes but help your kids understand the difference between what they need and what they want. While they need a new coat for school, they don’t need an expensive name brand coat. They need to eat dinner but it can be cooked at home rather than ordering out. They won’t die of boredom if they don’t have the newest Lego set.

Set Goals – Your teenager will want a car someday. Younger kids may want a new toy or spending money for a special occasion. Talk to them about how forgoing a small purchase today will help them reach their goals.

Establish Some Rules – Establish some simple rules for spending and saving. Do they get to spend all their money all the time? How much should they save? This is a personal question for your family but one basic rule of thumb is to save a quarter or a third of any money they receive.

Talk To Them About Costs –There are many costs to spending money. If you occasionally have your child pay for something out of their own money, they will associate buying the thing with seeing their savings level dwindle some. Talk to them about how if they buy this $5 toy, it will take them longer to save for the $20 item they really want. Help them rationalize how badly they want the small thing versus the bigger savings goal.

Talk About Yourself – Don’t be afraid to tell your kids your personal savings story. Do you wish you had started saving money earlier? Help them learn from your mistakes! Are you a great saver? Share with them why it’s important to you and how you prioritize saving. Talk to them about the choices you’re making every day. Help them understand that clipping coupons and buying store brand green beans is how you can afford to take the family on vacation this summer.

Saving money is like a muscle that needs some exercise. The more you save, the stronger your desire will become to make good money choices. It’s much easier to create a savings habit at a young age than to change behaviors in adulthood.

Kids and Money: Seven Tips

As community bankers we frequently visit classrooms to talk about banking and money management.

For the little kids we focus on the difference between needs and wants and on the importance of saving money. For the teens we talk about more complex topics like how banks and credit works. We talk to them about what happens when you borrow money, why everyone needs a checking account and what credit scores mean.

We do this because we believe financial education is important and we are happy to provide this service to youngsters and young adults in our communities. However, we hope that parents will spend some time educating their kids about these topics as well. Here are seven tips to get you started.

Teach them about saving. Whether it’s a piggy bank, a clear glass jar or a passbook savings account, teach your kids to save money and to be excited about seeing it grow. Talk to them about how saving money means they’ll have funds for something they really want or need in the future.

Talk about the difference between needs and wants.   This is a lesson that a lot of adults could use as well. In talking to third graders with our Teach Kids To Save program, we find that they have an excellent grasp on what they need and what they want. They need a pair of shoes. They want the kind that light up when they walk. By the time they’re in high school, we find it’s often harder to get them to admit they don’t need the latest iPhone.

Talk about the cost of things. As you’re grocery shopping or making decisions about purchases, initiate a conversation about why you are buying the off brand canned goods or how buying in bulk saves money in the long run. Help them understand that even the small purchases call for decision making.

Give them a chance to earn money – Whether to give allowance or pay for chores is a personal decision each family must make. We will say that there is wisdom in providing kids with the opportunity to manage money they had to earn. Modest pay for chores or allowance gives them the chance to learn about responsible spending and saving. If you have teenagers, encourage them to take on a part time job or to do odd jobs in the neighborhood.

Help them open a Student Checking Account. They will need one eventually and learning to manage an account now will help them later in life. Click here to learn more about how Student Checking at VCNB works.

Discuss Debt. This is a good subject for everyone but especially for teens who have their eye on car ownership. Talk to them about things they might need to borrow money for – like a car, college education and house – and about saving money for a down payment. Also talk about how to manage a credit card responsibly and why they should avoid charging more than they can pay off in a month.

Talk savings. Teach them about the three most important kinds of savings for adults: personal, emergency and retirement. While retirement savings may not seem like a priority to a teenager, it will be important in a few years once they’re starting out in their career.

Your kids are going to learn about money from someone. Wouldn’t it be better coming from you?

Teach Your Teens About Money

Don’t know where to start when it comes to teaching your teens about money? We’ve broken it down into four basic categories to make it easier.

Handle a Paycheck 
Life is expensive for a teenager. They want new clothes, money to socialize, gas in the tank and the latest and greatest gadget. Up until now, their expenses have been minimal and their weekly allowance has probably been enough to cover their wants.

If they’re old enough, this is an optimal time to enter the workforce. A part-time job will teach your teen responsibility and the value of a hard-earned dollar. It also provides opportunity to learn about taxes and budgeting.

Sit down with your teen when they earn that first paycheck and discuss the concept of taxes. Show them how taxes impact take home pay and teach them to examine each pay stub for accuracy. If they are 18, encourage them to open a checking account. Regardless of their age, a savings account will be an important tool as well.

If your teen is too young for a job outside the home, they may be able to make extra cash babysitting, raking leaves for neighbors or doing extra chores around your home.

Develop a Budget
Regardless of how little or how much money an individual makes, having a written budget goes a long way toward stabilizing finances, ensuring that savings goals are kept and bills are paid on time. The first step to developing a budget is to simply list all sources of regular income such as allowance or job earnings. Then have him or her list the expenses they typically pay. Demonstrate that their budget may be consistent or may fluctuate monthly. For example, they may have prom related expenses that only occur in the spring while their car insurance premium remains the same each month.

Talk to your teen about paying themselves first. By setting aside a percentage of their income each month when they’re young, it is easy to develop a savings habit that will last a lifetime. It’s also a good time to set aside funds for those large life expenses like a new car, college education or an emergency fund.

After setting aside some for savings and itemizing their bills, add up the expenses and compare that with the income. If they are spending more than they earn or are spending most of what they earn, talk to your teen about their spending decisions. Are there ways to cut costs or eliminate a frivolous expense?

Once their budget is set, encourage your teen to regularly review and stick with it.

Save for the Future
We touched on it above but the teenage years are a great time to start saving for large life expenses. You provide for their current needs meaning that their expenses should be pretty low. It won’t be long before they are on their own, responsible for their own food and shelter. Life will never again be as inexpensive as it is now and you should encourage your teen to take advantage of these circumstances.

If they don’t have a savings account, assist them in finding a bank and opening one. Then encourage them to tuck away as much money as they can.

Be Smart About Credit
A good credit score will open doors for your teen someday. A good credit score will enable your son or daughter to access better rates for home loans, car loans and even insurance. A good credit score may help them get a job or apartment. A bad score though could wind up costing them a lot of money as well as employment or that apartment in the neighborhood they love.

To help them start out on the right foot, consider helping your teen acquire a credit card with a low limit. Teach them to use the card responsibly, never buying today what they can’t pay for tomorrow. Teach them to pay the balance every month to avoid interest charges.

If you are terrified to hand your teen a credit card, consider starting with a prepaid spending card like the prepaid MasterCard® cards we offer at VCNB. It looks like a credit card but is pre-loaded with funds. It typically is accepted wherever Mastercard is accepted but there is no risk of them running up debt. Once the pre-loaded funds are gone, the card no longer works until you add more.

One More Thing
Keep in mind that your teen is approaching young adulthood. In fact, they sometimes seem very grown- up already. However, your teen is still a kid. Encourage dialog about financial decisions and the questions they have concerning money management. Money and credit will impact their quality of life for the rest of their life. Encourage them to start on the right foot today to secure a lot of bright tomorrows.