Solid Money Tips for Teens and Young Adults

Talking to you kids about anything these days can be a challenge. With so much information out there at the tap of a phone, from mental and health issues to financial advice, it can be hard to cut through the chatter and know what actual good advice is.

There have been endless studies about teen and social media behavior, but some common conclusions are intriguing:

• 80% of teens still get basic advice from parents
• 35% to 50% of teens use social media for advice on mental health and money

While teens are still turning to parents for advice rather than social media, it’s a good time to review these tips for creating good money habits for teens and young adults from F&M Bank. And who knows, maybe along the way you can improve your own money habits and make creating good money habits a family affair!

Start With the Basics

A good approach to starting the conversation about money with your kids is not to dumb it down but focus on the basics that many financial experts have relied on for years. Even if your kid doesn’t have a part-time job yet, knowing these basics can still help for when they get their first paycheck.

• The 50/30/20 Rule – divvy up each paycheck into chunks with 50% going towards needs like gas money, 30% for wants such as going to the movies or dinner with friends, and 20% for savings.
• Track spending – have your kids log all purchase to start seeing spending habits.
• Pause for buying – teach your kids that sometimes it’s best to pause before buying something they might have been saving for.

When you start with these basic tips, it will make more complex conversations easier to have. Let’s get into some more advanced tips and how F&M Bank can help you and your kids be smart about money.

Set Money Goals

No matter what your age, you will always have some type of goal to work towards. Talk to your kids about what is important to them like starting to save for college, purchasing their first car, or even a trip. You can help them create small savings goals using the 50/30/20 rule to break it down to make it feel less stressful, and track progress to make them feel great about reaching their goal.

Budget, Budget, Budget

Hopefully as a parent you will have a working budget to help you stay on track with your money against your needs and goals. You can help your kids do the same. Share how you go about listing out all bills and financial obligations, any things you want to do like a fancy dinner, and savings goals so they have a real-world example. This will help them begin to understand the importance of creating and tracking a budget, even if their income from a part-time job is low.

Consider Being An Employer

Depending on where you live, your kid may not have many opportunities to find a part-time job, so try creating one for them! Think of it as a more structured allowance; instead of basic tasks like taking out the trash, think of larger projects or jobs they can safely do like doing the weekly grocery shopping. They can learn about sticking to a grocery budget while earning their own money, making it a family affair.

Talk About the Concept Between Emotions and Money

This is related to social media, where ads with links to instant purchase are very common. By having a conversation about the difference, it can set the stage for their future. Here is a good guideline to help you get started:

• Impulse Buying – this is making a non-budgeted purchase simply based on an add and not checking savings first.
• Retail Therapy – everyone does retail therapy at some point, so help them understand that while buying something may feel good at that moment, it’s not a true emotional fix.
• Peer Pressure – we all were jealous of a classmate having the latest sneaker and feeling left out, so teach them the value of sticking to their budget rather than cave into being like their peers all the time.

Open Their First Checking Account

This topic was saved for later because there is no sense in opening an account without having the tips and conversations we covered.  Once you feel they are ready, open a Basic Checking account or a Treehouse Club Savings account at F&M Bank.

Basic Checking

• Open a joint account with a $10 minimum deposit
• Free Visa Debit card with access to online banking to keep track of purchases and help them get ready for their first Credit Card
• Access to F&M Bank’s Financial Health Suite to help them learn about protecting their financial information early

Treehouse Club Savings  

• Perfect for kids ages 8 -18 to start their savings journey
• $5 opening deposit with a competitive interest rate
• A prize for every 5 deposits made
• Transition to Premium Savings Account when they turn 18

F&M Bank’s suite of financial products and services are a great way to start your kid’s financial journey. While larger banks may have the same online features, they don’t have the local touch like F&M Bank. We don’t just service in Virginia’s Shenandoah Valley, we live here, too.

Expand the Conversation When They Get Older

When your kid reaches college age and is ready to start early adulthood, it’s time to expand the conversation to more complex financial topics. Especially if they started early with good money habits, this is a logical next step. Fortunately, F&M Bank has a wide range of products that are suitable for when it’s time to for them to think more about their future.

• Certificate of Deposit – CDs are a great way to save for both short and long term goals. CDs tuck away funds for a set period of time and earns interest before maturity, making them the perfect introduction to longer-term savings.
• Money Markets – higher yield savings accounts that earn interest over time. Often requiring a larger initial deposit, Money Markets can be good transition from a basic savings account into an account that can help money grow.
• IRAs – while most companies offer an IRA, consider talking to your young adult about opening their own IRA. Keeping a separate IRA account means as they move through their career and change jobs, they still have a dedicated retirement account that they fully contribute to.

The F&M Bank Difference

We covered many topics about helping your teen and young adult understand and create good money habits, along with age appropriate F&M Bank products to get them started. Let an F&M Bank representative help navigate selecting a combination of products to start your kid’s financial future.

Since 1908, F&M Bank has served communities across Virginia’s Shenandoah Valley, including areas around Harrisonburg, Staunton, Timberville, Bridgewater, Broadway, Elkton, Grottoes, Luray, Edinburg, Winchester, and nearby I-81/I-64 corridor communities. Contact us or visit us at one of our locations and speak with an F&M Bank representative. Come see why banking local makes all the difference.