Today's young adults live in a digital world. There are dozens of budgeting and banking apps to automate budgeting, track spending and set financial goals. Many online banking apps have automatic budgeting tools built in. Of course, there are always spreadsheets or a good notebook and pen for manual budgeting. Experiment to find the best method for your child and use it to teach them how to budget their money.
Young adults generally have limited finances. They simply haven't had enough time to generate income, build up savings, invest or build a career. That's ok, and as a parent, you should let them know it's ok.
They're at the beginning of their journey into financial independence. They don't need to have it all figured out or compare themselves to their peers. Teach them to be content while they learn, grow and work to improve their financial standing.
People often value the things they earn more than what they're given. Encourage young adults to earn their spending money instead of relying on you to pay for everything. Have conversations about finding a job when they're old enough or finding other ways to earn money, like doing chores around the house or for others in your community.
Not all debt is bad, and it's important to advise kids on the different types of debt. Some kinds of debt, like student loans or a mortgage, may offer a good return on your investment.
On the flip side, other types of loans and credit cards with high interest rates, are generally considered bad debt. That doesn't mean they should be scared to use credit cards or apply for a loan. Teach them to use these types of tools responsibly, not to overextend themselves and to make on-time payments.
Continue to support your child as they get older and inch closer to financial self-sufficiency. Here are some ways to provide ongoing support.
Checking accounts are ideal for everyday spending. Help your child find and apply for a checking account. Many banks offer checking accounts specifically for students or minors. Others may offer standard checking accounts with waived fees for customers under a certain age.
Features to look for when comparing student checking accounts include:
● No or low monthly fees
● Low opening deposit requirements
● A debit card and fee-free ATM access
● Branch locations close to home or school
● Mobile banking
● Zero fraud liability protection
● Text or email alerts and notifications
Custodial and minor bank accounts often come with parental controls that allow you to keep tabs on your child's spending. Look for banks offering joint banking, especially with online or mobile access.
Continue to have an open dialogue with your child about upcoming expenses, needs and any habits or trends you see worth discussing.
Independence is important to teens and students, but so is safety. Build a financial safety net for your child to prepare and protect them. Consider linking a savings account to their checking account or creating a separate account to use as an emergency fund.
If using a joint checking account, use parental controls to set spending limits to help them keep spending under control. Even better, develop spending limits together so everyone is on the same page.
There's nothing more rewarding than seeing your child succeed. You can participate in that success by teaching your kids to develop good money habits early on and continuing those lessons into high school and beyond.
Are you ready to open a bank account for your child? Contact us to learn more about our Banking Freestyle Student Checking Account or Minor Savings Account