How Our Michigan Bank Helps Set Them Up for Success
Learning to manage money is an essential life skill. The recent economic downturn brought about by the COVID-19 stay-at-home orders has made it difficult for people of all ages to pay expenses and maintain a budget. Fortunately, the economy is cyclical, and it will recover. But during these tough times, helping your teen understand how to make the right decisions with money will instill habits that lead to long-term financial literacy.
Checking Account Basics for Teens
A checking account is a bank account that holds money to pay expenses. Typically once your teen is 16, they may be eligible to open a checking account with a parent or legal guardian as co-owner at Michigan banks like Level One. Teens can deposit cash or paychecks into the account, then withdraw the funds to make purchases or pay bills.
- Most banks in Detroit, Ann Arbor, Grand Rapids, and across Michigan require only a small minimum opening deposit and have few to no maintenance fees on teen checking accounts. Level One Bank offers a free checking account.
- With many banks in Michigan offering technologies like online banking, bill pay, and mobile banking, your tech-savvy teens can have easy and immediate access to the account.
How You Can Help Your Teen Manage a Checking Account
Banks in Michigan have a few tips to share with your teens as they begin using their checking account:
- Encourage your teen to keep the checks and their debit card (if applicable) in a safe place. Discuss the importance of not giving anyone access to these financial tools.
- Talk with your teen about the importance of keeping track of all transactions, as not all transactions will post immediately to their account. For example, some debit card transactions may take a few days to post.
- If your teen actively uses the account, suggest using either a transaction register or a mobile app to help keep track of their purchases and checking their online account balance frequently to confirm it’s accurate.
- Each month, plan to set aside time to review account statements with your teens. Show them how to balance their checking account by adding any new deposits and subtracting payments or withdrawals not reflected in the statement total.
- Outline a simple budget in an Excel spreadsheet to explain the concept of cash flow. You may want to explore whether a personal finance app would be useful for helping your teen create a budget or set spending limits.
Finding Opportunities to Make (and Save) Money
While many teenagers have an innate entrepreneurial spirit, others may need coaching about ways to add funds to their checking account. You can brainstorm ideas for after-school or summer employment, including starting a business.
Savings are an essential element of financial security. It’s important to explain the concept of "money that stands still": funds that stay in a savings account earning interest until needed for a special purchase or an emergency. Putting a portion of their earnings into a savings account helps teens understand how to pay themselves first before making any purchases.
Partnering with Level One Bank
When your teen begins working or when you both feel it’s the right time, visit a Level One Bank banking center to open a checking account. Our Level One @ School account gives teens cashback with each swipe of a debit card that uses the credit option for the transaction. Your teen will also have free access to every ATM in the nation, including ATMs at other banks and non-bank ATMs. If you see an ATM fee, we will automatically refund it! Contact us for more information or visit our site here to learn more about our Level one @ School checking account.
“Teenager Post #24009 - *goes online shopping* *puts everything I want in a cart* *checks subtotal* *laughs and closes tab* - online window shopping saves my bank account one tab at a time."