Understanding Financial Considerations

Posted on: 24 April 2023

Encouraging your teen to open a checking account will support responsible spending practices. Your loved one will be establishing their payment history, plus will be learning valuable budgeting skills. 

Independence And Accountability

Having access to a checking account will provide your child with a sense of independence. They will learn to be accountable for each check that they fill out to pay for their car insurance, clothing, school essentials, and other incidentals that they are responsible for paying for with their earnings.

Upon opening a checking account, your teen will be provided with a ledger and checks. Demonstrate the proper way to record transactions within the ledger. You may need to assist your child with balancing their checkbook during the first few weeks of them opening a checking account.

Once your teen becomes accustomed to the proper way to record payments and calculate how much money is left in their checking account, they will have a solid grasp on how much money is at their disposal during each pay period.

Budgeting Basics

Once your teen has a checking account, they will be provided with a clear vision of their spending habits. This could prompt them to improve their budgeting skills. For instance, if your teen has a high-ticket item in mind that they would like to purchase, they may begin holding onto more of their paycheck each week.

As they receive paychecks from their employer, they may be prompted to deposit them directly into their checking account. As time progresses, your teen will see their checking account balance grow considerably.

Reaching a financial goal could encourage your teen to continue to save money. They will discover that their saving strategies provide them with the funds they need to make special purchases.

Credit Support

Although having access to a checking account won't improve your teen's credit score, it will set the foundation for a solid credit history. If your loved one has many recurring bills that they are responsible for paying, they will get into the habit of filling out checks on a routine basis.

This type of practice can benefit your teen in the future. As they get older, they will be accustomed to paying their bills in a timely manner. Once your teen is a legal adult, they will be more likely to maintain good payment practices. As a result of your teen's efforts, their credit score may remain in good standing. 

Find out more about opening a checking account.