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While teens can watch hundreds of videos on the Internet about finances, experience is often the best teacher when it comes to managing money. But it can feel overwhelming for them to know where to start learning the fiscal ropes. Opening a checking account gives them a learner’s permit to handling financial matters with the peace of mind of having an adult as the co-owner. 

At Space Coast Credit Union, we offer a free Student Checking account just for teenagers aged 13-17 (with an adult on the account), which doesn’t require a minimum balance or direct deposits. Plus, they’ll get a free Visa® contactless debit card. But all of the features are just the tip of the iceberg. They’ll gain a variety of financial skills that will benefit them for the rest of their lives.
 

Skills Teens Learn from Opening a Checking Account

1. Picking up skills in financial literacy 
From opening a checking account to managing it, the steps along the way will help them build a stronger financial literacy foundation. For example, they can attain a better grasp on the meaning of terms, such as “balance,” “deposit,” “routing number,” and “overdraft fees.” This will grow their confidence with money leaps and bounds. 

They can also take a look at their monthly statements to learn how to analyze transactions and monitor them for any errors. This is a good opportunity for them to learn the difference between discretionary income and disposable income. When they can see the big picture, it can help them make better choices with their money. Plus, it’s a good time for the adult account holder to answer any questions.

2. Learning how to deposit, distribute, and withdraw money
Checking accounts are often the first stop for money before traveling to other accounts.  With an account, teens can learn how to transfer money to a savings account or send funds to a friend who picked up lunch. And it can be a way to introduce them to bill payer for automatic payments. They can also learn how to pay for items with their card at the store, how to deposit checks, and how to withdraw money from ATMs.  

Also, while checks may be outdated, it can be useful for teens to know more about them for a variety of situations. The adult account holder can teach them how to write a check to pay bills or gift others. Plus, they can learn more about setting up direct deposit with a voided check. (And they can save money with checks at government institutions or vendors that charge card transaction fees.) 

3. Getting a handle on expense tracking and budgeting
With a checking account, they can learn to track their spending and budget accordingly, which is hard to do with cash. At SCCU, they can monitor their expenses easily on their Online Banking account or on the Mobile App. They can also get into the habit of saving as well. For example, they can learn more about the 80/20 rule — saving 20 percent and spending the other 80 percent. The adult on the account can then break down where the other 80 percent should go, such as clothes, bills, and food. 

Teens can set up spending limits if there’s a concern about overspending. They can learn how to avoid expenses on fees, such as ATMs and returned payments. SCCU offers a large network of fee-free ATMs, which they can find here. Learning how to manage expenses will be an eye-opening experience for them. But they’ll have an easier time transitioning to handling finances on a bigger scale as an adult.  

4. Differentiating between needs and wants
Teens often get their first job while in high school. Once they get their first paycheck, they can start to recognize the value of a dollar with their own eyes. (And see taxes that go to Uncle Sam, too). They can begin to understand that their earnings equate to time and hard work. Depositing earnings in an account is an opportune time for them to learn how to be more judicious with spending their earnings. 

For example, they can start to begin learning how to prioritize necessities over their “wants” (e.g. school supplies over video games). Most of all, teens learn that spending more than they have can come with consequences (AKA overdraft fees). And by saving money for something bigger, like a shiny used car, they’ll learn it pays off not to overspend. 

5. Protecting their account from identity theft 
While we all want to believe that we’ll never get scammed, fraudsters often aggressively go after minors’ financial information for a “clean slate.” When teens have an account, the co-owner can show them the importance of covering their PIN on merchant keypads and at ATMs, keeping their debit card in a safe place at all times, and creating and using account passwords responsibly. 

Ultimately, monitoring the account daily is one of the best ways to stop fraud in its tracks. Teens can download Card Controls in SCCU’s mobile app and set up transaction alerts. At SCCU, we also automatically enroll members in 2Way Text Fraud Alerts as a courtesy, so both account holders will receive text messages immediately upon any suspicious activities. 

6. Building their financial reputation
Teens don’t develop a credit score directly from a checking account, but having an account is a good way to start off on the right foot with lenders. It’s also a good bridge to teach them the difference between debit and credit. When they apply for credit applications down the road, lenders may request to look at their checking account’s payment history to see how good they are with managing money. By developing healthy money habits as a teen, this will also give them a better chance at handling credit cards and paying off loans more responsibly as an adult. 

7. Developing skills in self-accountability
Most teens can’t wait to grow up and live on their own. And being an adult involves handling expenses and saving money, especially to achieve dreams like getting a home, going to college, traveling to new places, getting married, and having kids. A checking account acts as a stepping stone to all of that and more. Teens will begin to learn they’re responsible for depositing money themselves to ensure they have enough to cover expenses. Most importantly, they’ll learn from mistakes they make along the way and become more independent with their finances.
 

How to Open a Student Checking Account

Teens can conveniently open a free SCCU Student Checking account with an adult online or in the closest branch to them. The process is easy and quick! We request some information about both account holders as well as a $25 minimum opening deposit. In addition, an SCCU Student Checking account converts to Free Checking for teens when they turn 18!

You can also talk to an SCCU Team Member about Overdraft Privilege, which ensures that transactions are covered by your other SCCU accounts if insufficient funds are in the checking account. If you have any questions, feel free to give us a call or chat live with us. Teens are well on their way to developing all of these financial skills with a Student Checking account!