“A penny saved is a penny earned.” – Benjamin Franklin
The great Benjamin Franklin was a wise man, indeed. If he were alive today, he might very well say that an online savings account is the perfect way to teach teens about fiscal responsibility. Teaching teens how to earn and save their money will pay off in the long run as they grow into financially responsible young adults.
Teenagers have special financial needs, but most importantly, they need to learn that Mom and Dad aren’t made of money. Parents are often the first source of information when it comes to money management, so it is important to start early. Here are some great tips for parents hoping to help their kids learn more about managing their money – and to get started, click here for more information.
Why teens should have a savings account
Unfortunately, many adults don’t know how to manage their money simply because no one ever taught them when they were young that the perfect gateway to financial responsibility is a savings account. Because these accounts allow only a certain number of withdrawals every month, teens are encouraged to spend less and save more. Additionally, they can watch their money grow with the interest earned each month; however, these are only the basic reasons why every teen should have a savings account.
Depositing money and balancing the register is only the first step toward developing a strong base in personal finance. The fee structure of a savings account is important for a teen to learn, the consequences of making withdrawals and overdrawing the account (if allowed) should be realized. Though the fees may seem simple to understand, they can play an integral role in helping teens understand the idea of keeping to a budget.
Choosing a savings account for any teen
With so many different types of savings accounts out there, choosing the right one for a teenager can be a bit of a challenge. Generally speaking a good savings account will have no minimum balance requirement and no monthly fees, unless the account has been overdrawn. When possible, securing a savings account with the highest interest rate is always beneficial.
Many banks actually offer savings accounts designed specially for teenagers. They are either low-cost or free to operate, and offer a number of perks as well as educational opportunities for kids and their parents. Just remember, for account holders under the age of 18 years, parents must co-sign on the account and accept financial responsibility for any missed payments, fees, or overdrafts.
Today, most teens probably know more about the Internet than their parents, which is why an online savings account might actually be the best bet. These accounts can be accessed from any computer, smartphone, or mobile device and may appeal to today’s tech savvy teen. With online account access, teens will be able to watch their money grow, manage the account, and view transactions in real time.
So, if you have a teen and you’re wondering why type of account(s) to set up for them, consider an online account and let teens learn how to manage their money by doing what teens do best…playing on the computer!