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Top Financial Concepts Every Teen Should Know

October 27, 2020

By

Eddie Behringer

After speaking with thousands of teens and experts, we have distilled a list of the top 5 financial concepts that we believe every teen should know. Check it out!

Banking Basics: Checking and Saving Accounts

We have distilled that the foundation of a sound money management background begins with knowing and understanding the two most common banking options: checking and savings accounts. We highly recommend talking to your teen about the purpose of each. Discuss interest rates, minimum balances, overdraft consequences, ATM fees and the pros and cons of each type of account.  Don't worry. Copper is here to help with our educational finance content for teens.

A Bank

Creating and sticking to a budget

If a teen has a cash flow from a part-time job or an allowance, set up a budget that documents how much money is coming in and how much is designated for savings and spending.

If you have one, either on paper or in a system, show your children your own budgets. If you aren't comfortable with divulging their own finances, you can also create a fictional scenario of an income and living expenses for teaching purposes.

Review the benefits of setting up a budget and, more importantly, sticking to it. It’s a simple way to convey a wide range of benefits including saving, tracking discounts and long term financial planning.

Teenager counting money

The Real Cost Of Life

In an increasingly cashless society, it can make it hard for teens to understand the true cost of their spending. We recommend that parents take the time to walk their teenagers through their financial transactions and really dive into how small changes in their financial interactions can pay out long term.

Teenager showing money

How To Read A Paycheck/Check

It's important to show children the source of the funds that cover all those credit card swipes, bill payments and cash injections.

Teaching a kid how to read a paycheck can also avoid future head scratching when the first one comes in and it's a lot less than what they expected. Walk your child through the different forms of taxes that might cause these deductions to their paycheck. E

Additionally, it can be very helpful to  teach your child how to write a check. We believe that it is still very important to master the basics to fully understand and utilize digital banking features.

How to write a check

The Difference Between “Good” And “Bad” Debt

Debt can be a necessary part of adulthood, but it is very important that parents teach their children how to distinguish the "good debt" from “bad debt”.

Money borrowed at a relatively low interest rate that helps you grow wealth over the long run -- like a mortgage or a student loan -- is considered good debt. High-interest consumer debt is the "bad" kind.

until debt tear us apart graffiti

We continue to make huge strides on the Copper app and cannot wait to show you what we are working on. In the meantime, we will continue to roll out educational resources like our Money Moves YouTube Channel where we review bite sized financial concepts. We continue to build Copper with financial education as the cornerstone of everything we do and continue to push toward our goal of preparing upcoming generations for their financial futures. We look forward to going on this journey with you.

Author

Eddie Behringer

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