Parents make sure that their kids are prepped for the college admissions process. They make sure they take the right classes, get the appropriate grades, study for the ACT or SAT, and participate in extracurricular activities. But do they make sure they’re equally ready to handle the financial aspects of independent living? Students may be able to do the math to calculate interest rates yet 43% don’t understand the differences between debit and credit cards.
And since few states have mandated high school financial literacy requirements, and even fewer include them in graduation requirements, it’s up to parents to prep their kids in financial literacy as well.
Given the skyrocketing cost of college and accompanying student loans, this isn’t a trivial concern to be squeezed in the summer before they start college. Just as a GPA reflects four years of study habits, financial literacy requires a longer time period to master. One way to start the process for teens is to open student checking accounts.
Even if students don’t have a job or gift money to use in the account, parents should consider putting some money into the account that students use to cover expenses parents usually pay for. The point is for students to start becoming familiar with the process and developing money management habits that will serve them well in college.
Of course, this is just one more thing that will take some time investment on the part of both busy parents and students. With everything else parents have to do, it can be a lot easier to just continue paying the bills and deal with it later.
Yet, if you really take the time to think about, you would probably admit that such an approach would be a mistake. Furthermore, chances are that making your student more money aware will make the college search process go more smoothly as well.
Teen Checking Accounts: Resources
So to help get you started and help improve college graduation rates while, hopefully, reducing student debt, I’ve found some resources on teen checking accounts you should check out.
If you’re looking for an in-depth, comprehensive, everything you need to know guide, read LendEdu Student Bank Account Guide. Yes, it’s long, but it has everything. One thing to keep in mind is that it is meant as an explanation for college students so it may not be the approach you want to take with your pre-college teen. You’ll also find extensive reviews of different banks in the bank comparison table below.
If you want a quicker read, try Nerd Wallet’s How to Choose a Teen Checking Account. The article does a good job of covering the basic questions you need to keep in mind when evaluating teen checking account options. It also mentions some other features to keep an eye out for teens.
Bankrate’s Teen Checking Account – 5 Tips to keep in mind article is worth a quick read for the monitoring activity tip.
While the Simple Dollar’ How to Choose a Teen Checking Account article covers pretty much the same material as Bankrate’s, it offers a little more context on why you need the account such as
“A lot of parents just think children understand how personal finances and checking accounts work because they’ve grown up watching their parents. But you’d be surprised. Teenagers often don’t understand that swiping a debit card is tied to money in an account,” says Uhlman.
Tips for Choosing a Teen Bank Account by SmartAsset isn’t particularly in-depth but does bring up looking for incentives:
Some banks may offer special incentives just for teens to encourage them to practice good financial and educational habits. For example, certain banks feature a cash for grades program that rewards students for doing well in school.
Teen Checking Accounts: Comparisons/Reviews
The following table lists the banks with teen checking accounts that were ranked or reviewed in various articles.
Teen Checking Account Reviews