Most teenagers live at home and have their parents as a safety net for financial concerns. However, as they get closer to adulthood, it is essential to ensure you have the financial know-how needed to avoid expensive mistakes related to money management.
When a teen moves toward financial independence, work a job and prepare to move out, they should be given tools and strategies to help them improve their money management skills. From taking out MaxLend loans to creating and sticking to a budget, keep reading to learn more about essential financial skills for teens.
Open a Checking and Savings Account While Living at Home
Teens should not wait until they are living alone to establish accounts with a bank in their local area. It’s smart to set up a checking and savings account and learn about these basic functions as early as possible. This includes things like using a debit card, using online bill pay features, and writing checks.
Opening checking and savings accounts will also help you establish a relationship with the local financial institution. Teens also get two essential financial tools they will need to have for the rest of their lives.
Use Money Management Apps
Money management apps offer a quality resource to help track income and set up budgets. They can also be used to help you identify trends in your overall spending behavior. With the right money management apps, it is possible to build better financial habits while tracking spending and progress over time.
Digital Tools for Saving
Like money management apps, you have several options when looking for savings tools and micro-investing platforms that utilize technology to help you reach savings goals. The tools range from mobile apps to programs offered by banks. The chances are that most teens will have a small, fixed income. While this is true, using the available tools will help them contribute to their savings accounts, even if they have limited extra money.
Opening a checking or savings account is a good way to develop financial history. However, these accounts aren’t going to help when it comes to building credit. You must take other steps to begin building a positive reputation that will lead to a higher credit rating. This will be beneficial if you need to buy a home, get a student loan, or finance the purchase of a vehicle.
Another easy way to build credit is by opening a starter credit card with a low spending limit. Fees and interest applied to credit card balances can quickly add up, so it’s important to stay aware of spending. One way to avoid overspending is by only using a credit card for a few things each month.
Teens should be taught financial tips early in life. This will help ensure they are prepared for the “real world” and that they can manage their financial situation. Being informed is the best way for any teen to take control of their finances and ensure they are prepared to do so for the rest of their lives.