May 21, 2024Empowering Your Teen with the Right Checking Account

Teenagers are at a critical stage of their lives where they are beginning to navigate the complexities of personal finance. Equipping them with the necessary knowledge and tools empowers them to make responsible decisions and build healthy financial habits.  

One pivotal step in this journey is selecting the appropriate checking account for your teen. Teaching teens money management skills goes beyond the latest bells and whistles in the financial world. It starts with real-world, hands-on guidance from you with an account that won’t punish them for minor mistakes.  

Key Features to Consider in a Teen Checking Account 

When deciding which checking account is suitable for your teen, keep in mind that the goal is flexibility and teachable moments. You don’t want to punish your child for mistakes. Instead, you want tools and resources that will build healthy financial habits and skills. 

  • Fee Structure 

Select an account with minimal fees and transparent pricing. You want to educate your child about potential charges, such as overdraft fees, and how to avoid them. Choosing an account with low to no fees ensures that your teen’s money is put to its intended use rather than being eroded by unnecessary charges.

Teachable Moment: Explain the importance of monitoring transactions and balancing their account to avoid Non-Sufficient Funds (NSF) Fees or potential Overdraft Fees. 

  • Setting Spending Limits 

Teaching budgeting skills early on is more than just a good idea; it’s a crucial step in preparing your teen for their financial future. Setting spending limits on your teen’s account acts as a safety net to prevent them from overspending and instills first-hand the importance of living within their means. 

Teachable Moment: Setting a monthly allowance cap teaches teens to prioritize spending and avoid impulsive and frivolous purchases. 

  • Parental Controls 

As a parent, having control features for your teen’s account provides peace of mind. Look for options to restrict transaction amounts or block certain merchant categories. Most financial institutions offer these features today in some form. These controls empower you to guide your teen toward responsible spending, ensuring their economic security while fostering independence. 

Teachable Moment: Restricting or blocking transactions at certain types of stores encourages thoughtful spending habits. 

  • Transparent Monitoring 

The ability to monitor your teen’s balances, spending habits, and other banking activities fosters a sense of accountability on both sides. Your teen knows you are keeping a watchful eye, and you can quickly identify areas for improvement and opportunities for discussion. This real-time visibility allows for timely intervention when needed and provides valuable moments for educating the whole family about financial responsibility.  

Teachable Moment: Reviewing monthly statements together encourages open dialogue about financial decisions. 

  • Effortless Transfers 

Life is unpredictable. Emergency expenses or last-minute plans can pop up at any moment. The ability to transfer funds quickly and easily from your account to your teen’s account gives you peace of mind, knowing that their needs are taken care of, even when you aren’t there. Being able to transfer funds between accounts seamlessly ensures that your teen has access to money when they need it most. This flexibility promotes financial independence while still providing support and guidance from parents.  

Teachable Moment: Transferring money for school supplies or emergencies demonstrates responsible resource management and ensures all parties can help when needed. 

Parental Guidance: Steps to Foster Responsible Money Management  

As a parent, nurturing your teen’s financial management skills goes beyond selecting the right checking account. It entails providing guidance and support to help them build lifelong habits. Here are some additional steps parents can take to empower their teens in making informed financial decisions.  

  • Encourage Goal Setting 

Assist your teen in setting short-term and long-term financial goals. Whether it’s saving for a specific purchase, setting aside money for college, or contributing to a charitable cause, goal setting instills financial discipline. 

  • Set Up Alerts  

Setting up alerts on your teen’s account is an effective way to stay informed of their financial activity. You can receive real-time alerts to notify you of low balances, large transactions, or ATM withdrawals. Enabling these alerts allows you to proactively address any concerns and initiate meaningful conversations about financial decisions.  

  • Designate Savings 

Encouraging your teen to save money is a fundamental aspect of financial education. By designating a separate savings account as off-limits and preventing access, you can ensure those funds remain untouched. You can even place the funds in a Share Certificate account or Money Market account so their savings can grow long-term. By keeping some savings inaccessible, you’ll help your teen cultivate patience, discipline, and an understanding of delayed gratification.  

  • Lead By Example 

Serve as a financial role model by openly discussing your own financial decisions and demonstrating responsible money management. Show your teen how to create and stick to a budget, prioritize saving, and make informed purchasing decisions. 

An Option from PEFCU: Free Checking! 

If you are a PEFCU member, your children are also eligible for membership! PEFCU offers free checking accounts that do not require a minimum balance and do not have monthly maintenance fees.  

We’re Here to Help!  

Empowering your teens to make wise financial decisions is an investment in their future. By choosing the right checking account for your teen, you are equipping them with the necessary tools to guide them through the field of personal finance and instill responsible practices that will last a lifetime.  

If you want to learn more about Teen and Youth Accounts and the tools available to parents, we’re ready to help. Please stop by any of our convenient branch locations or call 800-226-6673 to speak with a Member Advocate today. 




Each individual’s financial situation is unique and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

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