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Money Management For Students in High School

My first tip is to open a checking/savings account for your kid. This will allow them to start to learn the basics of money management. Many institutions offer a service that notifies you via email or text message if the account falls below a certain balance. Set the threshold high enough that you don’t get caught with overdraft fees. You want to teach your kid how to manage money – but you don’t want it to cost YOU money! If your kid falls below the threshold – charge him an overdraft fee.

Next, I would set him up with a debit card. It’s often difficult to manage money when you are able to withdraw funds anytime you want. Plus, the balance shown at the ATM is not always up-to-date. It is important for your student to understand that checks written do not post immediately. Also, ATMs can charge withdrawal fees. Plus, most gas stations will allow overdrafts if you pay at the pump, but will not accept a debit card inside if there are insufficient funds. All of these scenarios can cause the inexperienced money manager to overdraft their account. Again, chose an institution that notifies you when the balance is low – so you can teach the life lesson without paying for it!

Another strategy that can be implemented while your student is still in high school is to create a budget. How much do they earn at their part-time job? How much do they anticipate receiving for holiday and/or graduation gifts? What are their expenses? Once you create the budget, make a point to revisit this budget each month and revise as needed. This revision process will allow you to help your kid begin to plan for big expenses (college books) and decide how much to put away each week in savings.

Utilizing these tips will assist your student in becoming a better money manager and hopefully keep them from adding to the growing college student debt. It is important to remember this is a process. Budgeting is a learned skill. There will be bumps along the way – but the experience will pay off in the end.