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Teaching Your Teen

Giving your kids a financial leg-up

The earlier you begin teaching your children smart financial habits, the more likely they are to start off on the right foot when the responsibility is on them.

Teach them the Basics

Basic conversations about finances like how to write out a check, make a deposit, balance spending, manage accounts online, and make a budget, will prepare your children for future financial responsibilities.

  • Writing Checks - It's important to know how to write out checks correctly in order to avoid any issues with depositing or cashing them. Go through the process with your kids, and explain the elements necessary to write it correctly.
  • Debit vs. Credit vs. Cash – Money is money, right? Not exactly. The idea of "virtual money" can seem confusing for those just getting started, though. Discuss the difference between debit cards (which works like a check but usually draws funds from your account sooner) and credit cards (a line of credit which draws from money that you don't have). Any form of payment may seem fine, but explain how each works and what may be best to use in which situation.
  • Avoiding Overdrafts – By viewing your account online and monitoring your spending, you can be sure to avoid things like overdraft charges. Explain what an overdraft is and some good tips for avoiding them. While your teen is learning how to use their accounts, it may be beneficial for you to monitor their account as well. Set up alerts to notify you when they may be getting close to a certain amount. Keeping a close eye on the account will help avoid overdrafts and teach your teen to be aware of spending.
  • What is Credit? – Although they may not be diving into using a credit card, understanding what credit is may be helpful once they step out on their own. Explain what credit is (a term used to describe an arrangement in which goods, services, or money is received in exchange for a promise to repay at a future date), how important it is to use it appropriately, and what a credit score is. Credit cards are the most common type of credit, and a context they may be able to understand more easily.

Uncle Sam’s Pockets

Sooner or later Uncle Sam knocks on everyone’s door. Talk to your teen about taxes, and whether or not they need to report their income to the IRS and the ways in which filing can be done. (Check with a qualified tax advisor for details regarding your state's filing rules.)

Keeping Personal Information Safe

Good habits about keeping personal information safe are easier to develop at a young age and can help protect your children for a lifetime. Teach your teen about internet safety of personal information and online shopping, and why documents like social security cards, birth certificates, prior year tax returns and blank checks are usually kept at home and out of their wallets and purses.

Planning for the Future

US Federal wants to help set your family up for success – now and in the future.

  • USFCU Youth products and services
    • First Step Checking - This free checking account option helps teach valuable budget basics. Plus, receive the first 50 custom image checks free. You may also qualify for a free USFCU Visa Debit Card to help make spending easier. 
    • Visa® Classic Credit Card - Enjoy the benefits of a low rate with our Visa Credit Card. This is the perfect first card that allows you to set a lower limit for your teen while still helping them understand and build credit.
  • Help your teen set savings goals for future purchases and expenses like college, a car, or vacation money.
  • Lemonade stands are just the beginning. Instilling an entrepreneurial spirit in your children will help them make it through even the toughest economic times.

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US FEDERAL CREDIT UNION | 1400 Riverwood Drive, Burnsville MN 55337 | 1 800-345-2733 | (952) 736-5000 | All Content © 2012 | privacy & disclosures
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