Teen checking account – 4 tips to keep in mind

A checking account can help teach your teen important money basics. Get them started in high school to help them learn money management at an early age.


You may have opened a savings account for your children as a way to sock away money for college or to teach them about investing. As they grow, however, they’re going to need to learn some other money basics, and that includes managing a checking account.

Those skills might be more valuable today than ever before: 36% of college students at 4-year institutions noted that overdrafting and managing a bank account are the leading causes of financial stress, according to the 2015 Money Matters on Campus survey by education technology firm EverFi and Higher One, a college financial services company. Furthermore, 12% indicated they never check their balances because they are too nervous.

Starting a checking account early for teens is a key way to avoid pitfalls later as it can help them better learn concepts related to money and can give them valuable practice in a safe environment.

Experts weigh in with strategies to help a teen open and maintain a checking account.

Choose the right age

While many financial institutions allow you to open a checking account starting at age 13, the best time for your teen might coincide with other milestones, such as a getting a part-time job or learning to drive.

“Generally, what I look for is a level of responsibility that usually comes about 6 months after getting their driver’s license,” says Christina Esterly, a Rio Rancho, New Mexico, mother who has helped her 5 children open checking accounts. Look for signs that your child is able to hang on to a wallet or purse and not lose a driver’s license.

Explain that a debit card connected to an account is the same as cash.

For accounts opened for teens under the age of 18 you’ll be a co-owner of the account as a parent. This gives you the ability to view the account and set up limits and restrictions.

Set it up together

If possible, link your child’s savings account to the new checking account, advises Allan Prindle, president and CEO of Power Financial Credit Union in Miami.

Then, walk your child through the process of depositing money earned from jobs, birthdays or allowances to the account. Place some in savings for later and some in checking for spending.

Remember that while your child has watched you swipe a debit card for years, he or she may not fully understand how the transaction works. “Explain that a debit card connected to an account is the same as cash,” Campbell says.

Then, when your child uses a debit card, “track the transaction and watch the process,” suggests Prindle. Show how after the card is swiped, funds are deducted from the account. Hang on to the receipt until the transaction goes through.

If your credit union allows you to deposit checks through a smartphone or tablet, show them the steps involved to take advantage of this feature.

Also, “teach your child the importance of never sharing account information with friends and to always use privacy measures when shopping,” adds Campbell.

Monitor activity

Once your son or daughter grasps the basics of the transaction process, make sure you set daily habits of checking their accounts. Using your smartphone app (or online banking), take 60 seconds every day to check the account balance.

Many institutions have a daily debit card limit for protection and you can customize the amount charged on a card during the day. Try starting small with a limit of $50 or $100 a day. Also consider setting restrictions on ATM withdrawals, beginning with $50 a day.

In addition to checking activity online, request text alerts if the account is low.

Make it a learning process

Esterly has set up a system in which her teens receive a stipend once every 2 weeks. From that amount, they need to cover gas, dining out, miscellaneous purchases and entertainment. “We also warned them if they overspent on some categories and didn’t have gas money, they’d have to do extra chores to earn more money or take it out of their savings account,” she says.

With technology we have a lot of tools for limits and controls — you can let your teens manage their accounts with the assurance that there are checks and balances creating a safe environment.

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