Financial Literacy is Key to Effective Money Management for Teens

Former Federal Reserve Chairman Alan Greenspan once stated, “Financial education is a process that should begin at an early age and continue throughout life. This cumulative process builds the skills necessary for making critical financial decisions.”

At Bank Independent we understand the importance of helping our community’s youth build a strong financial foundation so that they better understand basic concepts like budgeting, simple interest, and establishing and maintaining good credit.

According to the Council for Economic Education’s 2020 Survey of the States only 21 states in the U.S. require high school students to take a course in personal finance. While this denotes a marked improvement since CEE’s first survey in 1998, there remains a sizable financial education knowledge gap.

Bank Independent believes that financial capability education, improves the financial health outlook for our youth and better prepares them to tackle unexpected financial situations or prepare for significant life milestones like paying for college, purchasing a home, opening a business, or building a nest egg.

Bank Independent offers the following tips for Gen Z and their parents to shore up money management skills and prepare for the post-graduate workforce: 

• Set Specific Measurable Attainable Realistic Trackable goals. Choose your priorities—whether it’s saving for a computer or building an emergency fund—and make sure they are achievable. Create a plan of action and measure your progress over time.  
• Start a savings account (if you don’t have one already).
• For working-age students, consider part-time or seasonal employment. You will learn more about personal responsibility and have an opportunity to manage expenses.
• Track your spending and avoid making impulse purchases. Create a budget and review it periodically to make necessary adjustments.
• Gain perspective about risk and reward. Knowing how stocks, bonds and mutual funds can affect an investment portfolio shows you how financial decisions can grow—or shrink—your savings. Some high school classes and financial literacy-based websites, provide simulations of how these investments work in the real world.
• Learn about credit scores—a representation of your financial past, present, and future. Bank Independent can offer tips to help you establish and maintain good credit. 

Bank Independent has specifically designed checking and saving accounts for customers between the ages of 15 and 25. Essential Student Checking Account has convenient features like Sync Mobile and Sync Online (free digital banking tools, Mobile Check Deposit, a secure Bank Independent Debit Card and digital wallet options which allow you to make a purchase right from your phone. 

Essential Student Savings is designed to encourage healthy saving habits and money management skills. Different from a checking account that provides immediate access to funds, a savings account allows your money to accumulate separately to meet long-term goals. For added convenience, Essential Student Savings comes with free Sync Mobile and Online banking, and Mobile Deposit. Students aged 15 and older with a valid government ID may open an Essential Student Savings without a parent or guardian.  Start earning interest on your savings and enjoy no service fees until you turn 26!