8 Tips for Teaching Teens About Money
It’s important to start teaching kids about managing their money early so you can set them up for success later in life. Below are 8 tips for teaching teens about money from our Levo experts.
- Teach them about what’s important. It’s not about what you have, or what you want to buy next.
- Stress the importance of giving. They can choose a charity or a cause that needs a little help. They can learn how much giving helps the giver as well as the receiver.
- Teach opportunity cost. Let’s say they make $15 a month at their part time job. If they buy that $15 movie ticket now instead of saving it for next month, they might not have the money next month to buy the $30 video game they’ve been wanting.
- Give them the responsibility of a bank account. Levo offers Starter Checking Accounts, which require a student ID and a parent or guardian to co-sign. “We have a lot of safeguards in place so parents and guardians can give guidance and provide a safety net,” says BJ Wylie, Vice President of Branch Services at Levo. “Parents or guardians are able to set spending limits on their child’s account until the child turns 18. You can also designate yourself as a joint account owner so you can see all transactions your teen is making.” These checking accounts come with a debit card equipped with Visa Secure – a free, simple-to-use service that confirms your identity with an extra password when you make an online transaction. Go to Levo.org/starter for more information.
- Teach them the difference between credit cards and debit cards, and the benefits and drawbacks of each. They might not be old enough for a credit card yet but it’s never too early to start the education. “Be sure to outline the importance of being able to pay your credit card off each month or that going with a debit card that only lets you spend what you have,” says BJ. If your card is lost or stolen, based on when you contact Levo, your losses can be limited to $0. Our Levo Starter Checking Account Debit Cards are protected by Visa Secure – a free, simple-to-use service that confirms your identity with an extra password when you make an online transaction.
- Get them on a simple budget. There are plenty of budget apps out there - or try downloading our Starter Budget from levo.org/starter. “Your teen’s budget should include things like savings, food, gas, entertainment, and charitable giving,” says BJ. “It’s a great teaching tool that can set them up for success later in life.”
- Teach them the importance of saving. Some parents require their kids to set aside half of all they earn in a savings account. When your teen opens a Levo Starter Account, they will automatically be enrolled in a Levo Starter Savings Account with only a $5 minimum deposit. We don’t charge any fees on our Savings Accounts – and, when they open a Levo savings account, they officially are a member-owner with their own share of Levo! Once they hit $50 in their account, they qualify for dividends.
- Teach them how to make the most of their money. Teens can invest in a money market account or a CD for higher-interest returns.
If you’d like to visit with one of Levo’s experts about options for your teen, go to Levo.org/starter or visit one of our branches today!