Raising Financially Smart Adults, What Can You Do Today?

Financial responsibility- don’t neglect teaching this important attribute to teens.

I am opening a checking account with one of my kids tomorrow. It’s an historic event. Soon small boxes of checks will arrive, in anticipation of careful spending.  My daughter has had a savings account but never a Visa card, nor a checking account.  She is walking toward adulthood, armed with fiscal consciousness. As a parent, I don’t take any of these milestones as small. 

It seems like only yesterday she was a tiny baby looking adoringly at mom as the answer to all her needs. Then she morphed into a Middle School alien who glared at me under a fringe of bangs as the source of the entire world’s frustrations. (At least I thought she was glaring. In those years it was difficult to see her eyes due to the fringe).  My daughter has grown into a young woman, leaving both dependence and the hostile fringe behind.

As parents we want so much for our children.  We hope for them to be intelligent, talented, of good character, etc. And we invest effort teaching, educating and praying the adolescent glaring ceases and they evolve into responsible adults. One area not to forget imparting is fiscal awareness.

Here are some ways to implement financial readiness in our teens:

As young as possible, open a savings account for them. Have them learn the process of savings early.  Some may argue with me on this, but don’t let kids keep all their birthday/holiday money for splurges. Even if it’s five percent of the till, they should deposit something in savings. If you start young, kids are less likely to buck the system.

When they get a job, negotiate with teens a fair amount to keep for spending and have them deposit the rest in their savings account.  

Agree in advance on what the savings account is to be used for. I personally do not agree that kids should only save or only spend all they earn. We adults have fun and we buy gifts for others.  College savings can seem far off to kids if they don’t get to take some earnings out now and then. Budget with kids either monthly or seasonally what is fair to withdraw and why.  

One of my friend’s kids withdrew all of her savings to buy a boyfriend an X-Box and games. If you fear the same, open an account that requires both of your signatures to withdraw money. I have never had to do this my kids, but it’s a factor to consider.

Open a checking account and obtain a debit Visa or Mastercard and possibly a credit card before they leave home. A checking account is tantalizing for us all. It’s tempting to over spend. Thus, I attempt this stunt with my kids pre-leaving the nest in order to employ corrective measures.

Things to educate the kids about checking accounts:

• Teach them to shop banks (fees, interest rates, minimum balance, ATM charges)
• Balancing checking accounts
• Disputing fees/Identity theft
• Maintaining records of transactions and statements
• Secure disposal of receipts and documents
• Online banking and setting up an online account

While some of those items may seem common sense, having a few kids in dire predicaments has taught me to leave no stone unturned.  One of my offspring, upon entering college, switched banks only to be dinged heavily by charges for ordering checks, not maintaining a minimum balance, and excessive use of ATM card.  I received an “SOS” text from him one night when he’d involuntarily overdrawn himself.

The bank I had set him up with before he left home had low fees, no check printing charges and a minimum balance of only five bucks. He didn’t ask the right questions of his new bank and paid heavily. I take some responsibility for that, as I didn’t educate the boy on banking as I should have.  He is not a detail conscious personality, and did not ask any questions. The paperwork the bank gave him came up mysteriously missing, lost before he could read it.  (I suspect these documents ended up in the bowels of his dorm room, which is a NASA recognized Black Hole.)

Therefore, take a few minutes and teach your kids banking. Start young, be flexible with savings, but consistent, and give your kids the gift of responsibility that carries into adulthood.

A wise woman recently said to me, “We are not raising children. We are raising adults.” Words to live by when it comes to smart financial parenting.