Many of us parents have a hard enough time managing our finances, it can be daunting to realize that we have an important role to play in teaching our children how to manage theirs. When I was a kid, I do not remember my parents giving me any advice or pointers or lessons on money management; there was one term of “Personal Finance” in high school and then off I went. I feel more responsibility to help my own children learn some of the basics. As my middle daughter has started college and is moving on to more independence, she decided it was time for a “real” bank account and it dawned on me it was time for some serious lessons coming from my direction.
Fortunately, many banks and financial institutions have financial products like checking and savings accounts that are created just for the student or young adult. These accounts have low or no minimum monthly balances and low service charges (or none) and are created to be convenient to the typical spending habits of a college student or young adult. As the parent, you can help the youth investigate and figure out which type of checking account is going to be best for them. Keep in mind that if the child is a minor, chances are you will have to be a co-applicant on the account until the child comes of legal age.
Opening the account is just the beginning. A child needs to learn all those little details that we parents may take for granted. Everything from how to make a deposit and withdrawal to how to keep a register and keep track of the financial transactions. There is more to a checking account than the typical passbook savings account that many children are accustomed to. I realized that I was going to have to teach my daughter about service fees, how important it is to understand the bank’s policies on fund availability, and how to manage her account online. The good thing is that the more we can educate and prepare our children for the responsibilities of managing the checking account, the more we can hopefully help them avoid some common pitfalls.
See Also: the MONEY Blog