There comes a time in everyone's life when independence is needed. It's been okay having your kid rely on you for money and its management, but eventually, a person needs to have their own funds and be accountable for them. A checking account is a great first step. a checking account can guide your child toward better saving and spending habits and make them more familiar with banking.
It's certainly an important part of life that will come into play sooner or later. So, how do you know when the time is right?
Make sure they're at the right age
The reality is, there isn’t a "right" age. As with many other aspects of your child’s life, you have to determine when they're ready. Are they used to receiving an allowance? How do they treat that money? Do they save or use it to buy things of worth or do they blow it all immediately? Do they have any financial goals? How soon are they likely to be out and about without their parents or other adult supervision on a regular basis?
Consider how responsible they are about other things
It's worth considering how responsible your teen is about other important things in life. For example, do they keep up with their studies? Are they punctual? Do they take care of their responsibilities without having to be reminded frequently? If the answer to these questions is no, then it may not be the right time to set them up with a checking account.
Make sure they know all the features
If your teen gets a checking account, take some time to go over all of the features with them, so they understand what they can and cannot do with the account. One major feature that your teen is likely to be most interested in is the debit card that accompanies their account. They will probably be using this much more than a checkbook. Using and being responsible for a debit card is a good precursor to having and using a credit card when they get a little bit older. They can get used to having access to funds via a card without learning about credit card debt the hard way. Be sure to explain about keeping track of the money in their account and the dangers of overdraft fees.
Help your teen get the account set up
It's worth noting that a teenager under the legal age, which is 18 in Nevada, must have a joint account with an adult. If the teen is 18 or over, they can open whichever type of checking account they prefer. You can help them get the account set up, either online or by going to the bank in person. Your child might feel more comfortable if you're with them in case they have any questions.
Check in on your teen's checking account activity
If you have a joint account, make sure you keep an eye on your teen's account activity. Are they making good decisions and being responsible? Are they keeping track of all their expenses so they don’t overdraw the account? Talk to them if there are any concerns. If it is determined that they aren't really ready, you can always close the account and try again when the time is right.
If you decide your teen isn’t ready for the responsibility of handling a checking account, you might consider a reloadable debit card. This card can be great for managing allowances and providing teens or college students with access to money, which is controlled by the amount you load onto their card.
A checking account demands a level of responsibility that some teenagers are ready for and others are not. At the same time, opening one can help teach a teen financial responsibility and help prepare them for the future.