How to Use Student Checking Accounts to Teach Financial Literacy
Managing money is an often-under-emphasized skill children should learn. Financial literacy teaches kids how to save money, spend it wisely, and how to invest it for the future. This critical life skill also empowers them to make wise choices as they mature and face the world.
A student checking account offers an easy and practical teaching tool to start their financial learning journey.
Create Budgeting Basics
With an Extraco Banks student checking account, you can quickly help your child craft a simple budget. Start by showing them how to monitor their income, whether from an allowance, gifts, or a part-time job. Then, guide them on how to divvy up their earnings into two or three “buckets,” such as spending, saving, charity, and goals.
Budgeting offers an effective way to illustrate the thought process behind money management. It’s a great tool to teach your child about their saving and spending habits and how to prepare to spend money on what they want or need.
Mastering Check Registers
It’s important for kids to understand how to balance their checking accounts. They record each of their transactions in a check register using Extraco's eBank app or pencil and paper method. Then they can see how spending and saving affect their finances.
Also, teaching kids how to use a check register is an excellent way to incorporate math skills into real-life situations. Financial literacy is a perfect way to include the concepts of debit — how money comes directly out of their checking accounts, and credit — how borrowing money works.
Master the Art of Saving
Saving is more than stashing money away in a piggy bank or savings account; it’s also about planning for their future and growing wealth.
Help your child set short-term and long-term savings goals. Start by establishing one long-term plan and break that goal down into three achievable short-term goals. Then, show your child how to track their progress to meet each smart goal.
Mastering the art of saving with a student checking account helps teach your children about patience and foresight — crucial skills they’ll need throughout their lives.
Decode Bank Statements
Bank statements can be a window into your child’s finances and how they spend and save. Use them as a teaching tool by helping your child read and understand their monthly statements. Discuss the different transactions, what they are, what they mean, and how they affect your child’s account balance. Bank statements effectively show your child the importance of tracking how they spend money to avoid overdrawing their account.
Avoid Overdraft Pitfalls
Speaking of overdrafts, mistakes happen to everyone. However, if your child has an overdraft, guide them through the learning process with the following questions.
- What is an overdraft?
- Why did it happen?
- What are overdraft fees, if applicable?
- How do you bring an overdrawn account current?
- How do you avoid incurring another overdraft in the future?
By teaching your children to monitor their account balances and routinely track spending, they’ll learn how to avoid the costs and inconvenience of overdraft fees.
Student Checking Account: Getting Started
So, which checking account might complement your parental expertise with the tools needed to master their money?
Our basic checking account is perfect for students up to age 24, with no monthly fee to worry about. And since most kids, especially teens, are always on the go, free mobile banking and deposit fit with their busy lifestyles. Finally, we’ve included some safety monitoring to ease your and your child’s minds with free FICO scores and Dark Web monitoring.
The Final Word
Imparting financial literacy to your child is a journey with continuous conversation. Using a student checking account as a teaching tool sets a strong foundation for responsible money management. And you’ll equip your child to grow into a financially savvy adult who will navigate the world of personal finance with finesse.