Teaching teens about money is one of the most important stepping stones to teens’ financial independence. The back-to-school season, when teens have some free time, is a perfect opportunity to start building financial habits that will last a lifetime.
Here are a few teen money tips that can help your teen grow more confident with money.
Perhaps one of the most important things your teen can do to grow their money skills is to open a teen checking account. Having their own account gives them hands-on experience with banking basics. It helps them learn basic budgeting (tracking income and expenses) and the importance of managing money responsibly.
Foothill Credit Union's MoneySmart Checking Account is designed for teens who are just beginning their financial journey. There are no monthly fees, and a free debit card is included. As a parent, you’ll have joint account access, and you can monitor your teen’s spending through online banking. You can also set ATM withdrawal limits and daily debit card purchase maximums, and set up eAlerts to be informed of account activity.
If your teen has a part-time job or receives an allowance, money can be deposited directly into their checking account. Consider letting them handle routine expenses like school lunches or small purchases on their own. During the first few months, go over account statements together to talk about their spending choices. This approach helps them learn teen money management skills as you guide and support them.
Teaching your teen how to handle credit responsibly can protect them from costly mistakes later. Having a good credit history can also open doors to better interest rates on a future car loan, make renting an apartment easier, and it can even impact future job opportunities.
Foothill's MoneySmart Checking Account includes a Platinum Mastercard that provides a safe way for teens to learn how to manage credit. It also helps them start building their credit history. Available to members 16 and up with a parental co-signer, the card features a credit limit of up to $500 to prevent overspending.
To guide your teen in learning how to manage credit, consider explaining how interest charges work when balances aren't paid in full and the importance of due dates. Your teen could start with small purchases they can easily pay off each month, like gas, meals, or a monthly subscription they already have. This shows them how to stay within their means and avoid carrying unnecessary debt.
Understanding the importance of tracking income and spending encourages teens to make smarter money choices. It also prepares them for bigger financial decisions later, like buying their first car.
One way to help your teen learn budgeting is to encourage them to track where their money goes. Consider sitting down together and creating a simple budget that separates their needs from their wants and encourages them to plan for both. Review it regularly to see what's working and what needs tweaking.
Today's teens are tech-savvy, and using technology can make budgeting more engaging. Budgeting apps like Greenlight allow teens to set spending limits, create savings goals, and receive real-time spending notifications. Greenlight also includes parental controls so you can guide your teen while giving them the freedom to learn from their decisions.
For teens who are ready to step up to a more advanced budgeting tool, YNAB (You Need a Budget) is a popular option. The app teaches teens to give every dollar a job before it's spent. Many budgeting apps connect directly to Foothill Credit Union accounts, which makes it easy to track spending and balances in real time.
Setting one or more goals gives your teen something to work towards. It could be a short-term goal, like concert tickets, a gaming console, or a new phone. It could also be a long-term goal, like saving for a down payment on a car or college expenses. When teens have clear goals, saving feels purposeful and rewarding, and not just another rule they're expected to follow.
A Foothill Savings Account can help teens reach their goals. It’s more than a place to store money — accounts also earn competitive interest. Your teen can watch their money grow through regular deposits and the compounding of interest, keeping them motivated. An account can be opened with as little as $5, and 24/7 online and mobile banking access makes it easy to track savings progress.
Another savings option for teens is a Youth Saver Certificate with special dividends. Your teen can get started with as little as $25 and make additional deposits anytime until age 24. It's a great way to build long-term savings while earning more than a traditional savings account.
In addition to hands-on experience, teens also need access to financial resources to understand how money works. Foothill Credit Union offers a variety of financial education tools that are focused on teens and money. Online resources allow teens and their families to learn at their own pace and revisit concepts as needed.
Online videos cover savings, spending, borrowing, credit, and other important topics that teens need to know. Online webinars for teens dive deeper into topics like budgeting strategies and building credit. These resources reinforce concepts and develop practical skills that teens can use right away.
One of the biggest challenges for parents is knowing when to step in and when to step back. While it's natural to want to protect your teen from financial mistakes, learning happens best when teens can make their own decisions within safe boundaries.
Consider checking in weekly or bi-weekly to review spending and answer questions. This time can be used to celebrate wins, address challenges, and adjust spending limits. Regular reviews enable you to catch problems early while giving your teen space to learn.
Back-to-school season is the perfect time to start equipping your teen with money skills for life. Before the new school year begins, introduce them to budgeting, saving for goals, and using financial tools and resources. They may not be in class yet, but they’ll be learning valuable skills that will serve them for years to come.
Ready to get started? Opening a MoneySmart Checking Account is a great way to begin. Open an account online or visit your local branch to help your teen take their first steps toward financial independence.
