As your child grows into a teen, he or she often starts wanting to purchase the latest technology, games, or clothing that they see in advertisements, social media, and from their peers. Thanks to our 24/7 digital world, kids are now marketed to more than any other generation in history. In fact, one study found that kids are bombarded with up to one branded message per minute*.
It’s only normal to feel concerned about the impact this may have on your child’s ability to develop sound financial skills and discernment. First and foremost, it’s important to talk to your child as early as possible about advertising and how its sole purpose is to sell you something. “Although it’s essential for marketers to get their reputable brand messaging out, it’s also important that parents teach their children how to decipher between something they want and something they need,” said Tim Randazzo, Brand Manager for First Bank.
As soon as your son or daughter starts earning an allowance, help them make sound decisions on how to budget a set amount to spend today, while also saving up for something they really want or need tomorrow. “As the founder of a charitable organization, I’d also encourage your children to use some of their earnings to help someone else. It’s called the “spend, save, and give” methodology. Developing an interest in stewardship as well as prudent financial management skills early on will only help them develop and grow as they become working adults.”
Here are six tips to help your teen gain financial readiness for adulthood:
- At a young age, set up a savings account that makes learning about money management easy and fun, much like the Kids Cash Savings.
- Take them to the store with you to learn how to budget money with something smaller in scale like that week’s groceries. Determine together what you intend to spend, what’s on your list, and how being creative with your shopping and comparison shopping can help keep those costs down.
- As soon as your child starts a first job or driving, it’s a good idea to open a checking account designed for young adults, like First Bank’s Student Checking Account (ages 16-24). This will allow him or her to have a paycheck direct deposited into their account while also having access to a debit card for purchases.
- Help your child understand that spending on something today may mean delaying a larger purchase they’re saving for in the future.
- Use reputable online calculators and tools, like budgeting apps, to help your child develop good money management skills. A good rule-of-thumb is to set aside 10-20% of what he or she earns into a separate savings account. This could be used to save up for something big, like for prom or a car, or to simply save for a rainy day. With First Bank’s eBanking, he or she could automatically set this savings strategy up. Basically, set it and forget it!
- Once you’ve helped your child determine their intended savings amount, you’ll want to next determine any expenses they may have, like auto insurance or cell phone plan costs. Assist him or her in setting up online bill payments as well as mobile app options to help manage outgoing expenses. Reminding them of the importance of paying bills on time is essential for solid money management.
Although discussing money, bills, and financial matters isn’t always a comfortable topic, it should be something that’s generally discussed with your son or daughter. Of course, you don’t want to burden them with stressful financial topics, but understanding general concepts of saving for the future, in things like savings and retirement accounts, and paying bills on time to help build good credit, are as important as getting good grades while in school.
Read more about “Teaching Your Teen About Money”.
If your teenager is ready to start gaining financial readiness, consider opening a First Bank student checking account online today.
*Today’s Kids are Drowning in Ad Noise Like Never Before, Kristi Pahr, Fatherly, Updated Jan. 20, 2022