By Chuck Bentley
My 17-year-old has a summer job outside the home. He needed a bank account so he could cash and deposit his checks. Helping him open an account was a great experience, and I learned a few things.
First, a student can open a bank account, at most banks, for free if they are age 25 or younger. If they opt out of the printed bank statement and do online only, there is no monthly charge. This allows them to have access to a debit card and ATM machines plus online banking and automated bill paying services.
In a recent article in Yahoo Finance, experts agreed with me that, “If you want your student to learn money management skills, get him or her a checkbook instead of a credit card.”
In fact, a recent survey of 42,000 first-year college students found that the earlier teenagers had access to credit cards, the less prepared they felt for managing their own money in college.
Those who had checking accounts, by contrast, were “markedly more prepared” to handle their finances than those who were “unbanked” before college.
“Young people need to have finite amounts of money to learn essential skills such as budgeting and monitoring their accounts,” said Janet Bodnar, author of the book Raising Money Smart Kids.
There you have it. Open a free bank account, and avoid the credit card for your student!
Originally posted 8/13/2015.
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