Key Takeaways

• That first job can be an excellent time to have your teen open a checking account.
• Gen Digital manages life on a smart phone, so banking should too.
• Choose the right account—how and why.
• Key learning happens via managing a paycheck.

So your teenager has a summer job—now what?

That first job is an excellent opportunity to learn all sorts of lessons—managing time, taking responsibility, following directions and a whole lot more. The result—a paycheck—is a learning opportunity too, including managing money, saving toward goals and keeping money safe.

It is also the perfect time to open a checking account for your teen if they don’t already have one. Opening a checking account can help your child learn about managing money and may even be a requirement, since many employers pay via direct deposit.

The right time

You’re the best judge of when your teen is ready to manage a bank account. Quite often, working for their own money is motivation enough to preserve those hard-earned dollars, or at least watch where they go. Chances are that if they can handle a job, they’ll be able to handle a bank account as well.

Gen digital

Teens today increasingly manage their lives  through smartphones—this applies to their money too. Keep a few things in mind when discussing their first bank account:

• “Checking account” may be a meaningless term. For their generation, money comes from an app on a phone.
• Spending happens via phones too. Your child is probably already familiar with apps like Zelle®, Venmo, Google Wallet™ and Apple Pay®.
• Life happens in real time. Access to digital banking offers teens real-time insights into their finances and aligns perfectly with their instant-gratification mindset.

Don’t forget why

Before you open a bank account, talk with your child about why they need an account (and what an account is) in the first place. Consider these reasons why now may be the perfect time to open an account and get that banking app on their phone:

• Their employer will most likely pay them automatically through direct deposit, so they need a secure place for the money to go.
• They can see when their paycheck arrives and watch their spending with their bank’s mobile app.
• Digital banking can allow your teen to set goals² automatically to save for things they want and to watch their progress.
• They can use their debit card to pay securely online or in person.
• Their money is safer in the bank than as cash in their pocket.

Choose the right account

Most banks have accounts designed specifically for young people. Look for an account with:

• No monthly maintenance fee
• Low minimum balance to open
• Mobile/online banking at no charge
• Debit card with no fee and daily transaction limits for responsible money management
• No overdraft or non-sufficient funds fees
• Easy links to savings

Depending on the bank, youth checking accounts are typically available for children ages 13-17. Whether or not an adult has to co-own the account varies. As an example, Lake City Bank’s StartSmart account is designed as a first bank account and can be opened by qualifying individuals age 14 – 23 without an adult co-owner¹.

To debit or not to debit

A debit card is a safe, convenient way to pay in person or online—it’s far more likely your child will want to use a card for their purchases. Keep in mind:

• Convenience and familiarity aside, debit card access can lead to overdrawing an account. Most accounts for young people (like Lake City Bank’s StartSmart account) limit the number and dollar amount of transactions your child can make, which can help reduce the risk of overdrawing.
• Debit cards from major carriers like Visa® include fraud protection that can return dollars lost through cybercrime.

Let the translation begin

Once you’ve identified the right account for your child, it’s time to open the account. It’s easier to start with, “Here’s how you can manage the money you’re earning at work on your phone,” rather than, “Here’s your checking account.” Your child may never write a check or use a check register. If you need help explaining, your bank will be happy to help.

Time for the digital app

Using a digital app is an excellent way to access real-time account information like balances and transactions. Managing money through an app will be more familiar and easier to navigate for your child as well.

To get started:

• Sign up for online banking or download the bank’s mobile app. As an example, with Lake City Bank Digital you can do virtually all of your banking 24/7 from any device.
• Navigate the digital app with your child or have a bank employee show you around.
• Have your child set up direct deposit for their summer job paycheck.
• Start the conversation about how to manage those dollars now. When the deposit arrives, you and your child can get to work.

Learning by doing

Now that your child is earning a paycheck and has a bank account, the door is open to expand on financial lessons. Before that first paycheck hits their account, you can start the conversation about spending, saving, and managing money in general. It’s easy to get started—just follow the steps and know your audience!

We can help your teen take the first step towards securing their financial future. For more information, or to open a StartSmart account, drop in to one of our branch locations or apply online.

¹You must be 18 years old or older and have a valid state-issued form of identification to open a StartSmart account online. If you are age 14-17, you may open an account in person at a branch location near you.

²Goals, as referred to herein, constitute the Goals Account described in Section E Investment Accounts of the Personal Account Terms and Conditions.

Must be age 16 to use Zelle® at Lake City Bank. To send or receive money with Zelle®, both parties must have an eligible account. You can find the updated list of participating banks and credit unions with eligible accounts live with Zelle® at Zellepay.com.
Zelle® and the Zelle® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.

Apple Pay is a trademark of Apple Inc., registered in the U.S. and other countries.

Google Wallet is a trademark of Google LLC.