You know, the one thing they do not teach your children in high school is how to manage their money – a very valuable life lesson. This leaves it to you, and while there are some helpful points below, don’t forget that modeling good money habits goes a long way. So, whether your children are in 9th grade or getting ready to move out to college, work with them to get them started on the three points below.
1. How to use a debit card
It’s harder and harder for teens to get credit these days, so the banks will not be descending on your children when they arrive for their first day at college. But, they will still need a way to manage their money without carrying around wads of cash. You can manage all this with a debit card, and teach them a thing or two about budgeting (next bullet!) while you’re at it.
If you’re reading this while your child’s still in high school, you can start all of this now, but if not, it’s not too late. The minute you step on campus, you will surely find out what the major bank in the area is, with a branch on every corner. This bank will probably have the lowest or no fees for withdrawals at ATMs, etc. Open your child an account here and make sure that you can move money from your bank to it without a fee!
2. Live within your budget
Now, teach them how to use that debit card by sitting down with them, before they leaves for school, and determining a monthly budget. This is based on any spending needs you foresee, plus a little that you might not. Then, determine the day of the month that you will deposit this money into their bank account. You may need to revisit the budget after a few months of living with it, but find a starting point that you both are comfortable with. It will be their responsibility to manage this money and make it last until the next deposit. And, in the upcoming school years, this account will become more complex for them to manage as the funds will cover a larger number and amount of expenses like rent or gas.
Bonus: To encourage saving over spending, make a deal with your child that any dollars left in the account at the end of the month will be matched by you. Students with money in their pocket to burn can use a good reason not to spend!
3. Don’t fall prey to identity theft
Now that your child has access to all this money and is trying out debit cards and budgeting, teach them not to fall prey to the latest “phishing” scams. They are the perfect candidates for it as they have no experience communicating with banks and other financial institutions.
You’ve probably been over this information with them before: don’t share personal information on Facebook, etc. Remind them now that banks and other financial institutions will NEVER request that you provide, or even verify, their social security number, logon id or password via email or the phone. Even if an email directs them, through a link, to the institution’s site – do not follow it. If your child believes the email is valid, simply open a new tab and log on to that website as you would normally.
Additionally, this may be the first time that your student is asked for their Social Security Number over and over. This is a good time to remind them that this one piece of information can lead to a world of hurt in the wrong hands. Only give out your SS to the bank you open an account at and any other places you feel are pertinent. Use a school ID for anything else.
About the Author: Need more One Minute Money Lessons? They offer quick money tips in small, bite-size chunks on a wide range of topics. Find more OMML at www.YourWealthInHand.com or follow us on Facebook by looking up One Minute Money Lessons. One Minute Money Lessons are brought to you by Beth D’Andrea, Financial Planner, LLC, the author of the recently released, 20 QUESTIONS ON PERSONAL FINANCIAL PLANNING, providing further information on how to take control of your finances. Get a 10% discount on this book by “liking” us on Facebook!