Banking, spending, and saving
Your teen will likely need a chequing account (for automatic deposits from work) and a savings account. Work with your teen to develop a set savings plan; whether it is a certain amount per month or a certain percentage of each paycheque, the important thing is to create the habit of ‘paying’ oneself first. To make it painless, many banks offer automatic transfer services that will, on a certain date or with each deposit, transfer a pre-determined amount from one account to another.
Examine spending habits
We all know the adult version of this theory: You get a $5 coffee at Starbucks every day. That’s $25 per week, $100 a month, $1200 a year. Cutting down to one coffee a week saves you about $950 a year, which is a lot of money to spend on something else.
The same thing goes with teens: One of the biggest perks of high school (at least as far as I can remember) was being able to go off the school grounds for lunch; daily lunch can add up as fast as a coffee habit. Another teen trap? Movies. Before she rushes out to see the newest Twilight movie seven times in a row, sit your teen down and help her do the math. And if she really must see said movie seven times, do the teen version of switching to Tim’s: Matinees tend to be cheaper than movies at night, and certain theatres offer lower admission than others.
Two words: Compound interest
I can still remember the day in math class when we learned about compound interest; by no means a genius with numbers, even I could grasp the concept of making money by saving money, and it was exciting.
If your teen proves adept at handing her own banking affairs, introduce her to high-interest savings accounts, GICs, RRSPs and the stock market. A good place to start? Get a tax-free savings account: The interest she makes is all hers, and she can’t lose her original investment.
