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The Nitty Gritty

Five Reasons Why Your Teen Should Have a Checking Account Now

There is a hard way and an easy way for your teen to learn about money. The hard way involves slapping a debit card into their hands on freshmen orientation day. Welcome to adulthood, kid. No pressure and no supervision. This schooling by way of hard knocks can be effective, but it’s often messy and can involve a parental rescue or two.

An easier way is to look at money management as a key life skill and teach it like you would cooking or laundry. There are lessons to be learned about things like bank accounts, credit card interest, credit scores and deferred gratification before adulthood.

A simple place to start is by opening a checking account for your teen long before you drop them off at college. Here are five reasons a checking account makes sense for your teen:

1. Builds good habits to last a lifetime
Encourage good habits from the moment your teen starts earning money and you’ll avoid the panicked call saying they are out of money six weeks into the semester. At Ardent, teens get a Cash Account for spending and a Stash Account for saving. With two accounts, the lessons of “pay yourself first,” compound interest and budgeting are easy to practice.
2. Learn how money management works while the stakes are low
Would you rather your teen blow through a paycheck from a summer job or spend all of their post-grad income and not be able to pay their rent? In reality, you hope for neither to happen, but it’s better to make mistakes with smaller dollar amounts. Think of this time as a transition. Your teen will be managing money with training wheels, aka your oversight, in place.
There’s even some cool tech to incorporate. Your teen can learn how to use the phone that is attached to them for something other than YouTube. It’s their bank-on-the-go with the mobile app, which offers transaction tracking, easy transfers, electronic payments and alerts related to balances and transactions. Oh, hi there, low balance alert. And the phone’s mobile wallet (Apple Pay, Samsung Pay and Google Pay) can be linked to their debit card to keep them from being without funds even when their wallet isn’t with them.
3. Monitor their spending and take advantage of “teachable moments”
Teens are bound to find out how easy it is to tap, insert, swipe or click without knowing how much is being spent/wasted. However, their shopping habits don’t need to go unnoticed – eBanking makes it easy to track what’s being spent and where. All you need to do is set up alerts within the app and you’ll be able to keep a close eye on the Wawa and Dunkin’ habits that need taming.
4. Keep their money safer by avoiding cash that is easily lost or stolen
In the event a debit card gets misplaced or stolen, your teen can disable the card with their phone. Ardent offers the SecurLOCK app, which requires only two clicks to turn the debit card into useless plastic. There is a peace of mind knowing the money is protected when the debit card is gone, unlike stolen cash. And you’ll never have to worry about them being stranded without gas money. But fair warning…with no cash in the pockets doing laundry becomes less lucrative for Mom and Dad.
5. Provide opportunity to show how responsible they are
Teens want nothing more than to be treated like a grown-up. Grown-ups have responsibilities. When your teen has a checking account and debit card they have a chance to prove they will do the right thing on their own. That proof helps you to know they are ready for the next steps – driving, credit card, etc.
Opening a checking account for your teen may seem like a big step, but it’s a lot less scary with you there beside them. Adulting here they come.
Ardent Cash & Stash Youth Accounts