Focus on the basics

Opening a bank account

Your first bank account is a big deal. It’s up there with getting your driver’s license as one of the first steps into adulthood. A bank account frees them from asking you for money and from relying on cash in their pocket.

A debit card also makes teenagers think about money in a different way. It’s not as tangible as cash so they’ll have to get into the habit of checking their account online to track their money.

When it comes to choosing the right account, involve your teen in the process. Get information from a branch or sit down with them to look at bank account options online. Discuss the benefits of the account, how it keeps money safe and accessible, how it can help money grow. Outline what they also need to watch out for, like charges on the account. A no-fee account is a great place to start looking for you teenagers account.

Paying yourself first

Once your teen has an account in their name, it’s the perfect time to talk about managing money. Teach the concept of “paying yourself first” (saving automatically) and saving money for short- and long-term goals. Short-term goals are an easier sell when talking to a teenager, so you don’t need to cover investing and retirement savings at this stage. Keep it relatable and talk about things like buying their first car or concert tickets or clothes.

Explain how automatically saving a set amount from every pay cheque will make it easier to get the things they want. This helps you transition into a chat about budgeting.

Creating a basic budget

It’s important to stress that a budget isn’t just about managing and controlling your spending, but also about ensuring you’re saving enough for your goals.

Consider working with your teen to set up a simple budget spreadsheet that documents how much money they will be earning and how much they might need to pay for things. This helps teens understand the idea of income and expenses, and the need to track their spending. Unlike when you were their age, your teens have options like apps or this Government of Canada online budget planner for help with budgeting.

Make this the first conversation of many

This can all be quite a lot for a teen to absorb. Consider leaving concepts like taxes, investing, risk and debt for another day. While life may come at you fast, there’s always time to sit down for another chat about such an important topic.

Talk to us to find out more about good financial habits for teens.