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While you likely already have a checking and savings account that you use throughout the year, have you ever thought about setting up a teen bank account for your teenager? Your child is never too young to have an account set up for them while learning how to manage money early. If you’d like to teach the importance of saving money and building wealth at an early age, consider opening teen bank accounts.
Teen Bank Accounts – Learn to Manage Money Early
We pay our kids for their grades. Better the grades they get the more money they earn. It's not a lot but it's something. This money all goes into their savings account that they'll get access to when they're out of high school. They get allowance monthly and my oldest does random yard jobs for extra money. This year, we're seriously considering a teen bank account for him so he can buy things he wants online.
Here are a few tips to help your kids manage money early on.
1. Start Saving Cash at an Early Age
One of the most valuable lessons you can teach your teenager is the importance of saving at an early age. It’s never a bad idea to save money. The best thing you can do is encourage your teen to put money into a savings or checking account when they receive money from family for birthdays and holidays. You might also add money to their account as a reward for doing chores, getting good grades, and displaying responsible behavior at home.
2. Learn Better Money Management
When you’re opening teen savings or checking accounts, you’re teaching them how to manage their money a lot better. It’s easy to have cash in hand, overspend, and then not even realize where the money went.
How many times would you say that has happened to you in your lifetime? Because you already know how easily it can happen to anyone, teach your teen the importance of managing their money better to avoid running into overspending issues.
3. Set Financial Goals
Encourage your teen to set financial goals. For example, they may want to reach $1000 in their account by a certain period. It gives them something to look forward to accomplishing through hard work and the ability to save money on their own.
Knowing what they’d like to purchase
Your teen may have a specific item in mind that they'd like to buy, for example, the latest game console. Setting a savings goal is a great way for them to learn the value of money. Plus, it's a great feeling when they've saved enough to get the item they've been dreaming about.
4. Easily Monitor Spending Habits on the Checking Account
Another perk of teen accounts is being able to easily track spending habits. If your teen has a clear picture of what they're spending money on, it can help them now and in the future.
Money quickly comes and goes
The idea behind this is to show your teen how quick money comes and goes. Teens often have a misconception that money lasts a long time, but when they’re spending and reviewing the details of their accounts, they can easily see that it isn’t the case.
Help your teen learn
As a parent, you want your children to develop good spending habits because you don’t want them to deal with debt in the future. If you can teach them good spending habits early, these things will stick with them. Instead of spending all the time, your teen may start looking forward to adding money to their savings account for when they need it most.
5. Teach Your Teen the Importance of Managing Money at an Early Age
It’s never too soon to teach your child the importance of managing money. If you have a teenager at home, it’s an excellent time to open a bank account that they can use to deposit their cash and build savings. Your teen may feel motivated to continue saving money when they see the amount increasing over time. With good money management, they have a greater chance of being more responsible with their funds in adulthood.
At what age did you get teen bank accounts for your kids?