Teen Talk: How Building Credit Instills Hard Work, Spending Habits and Financial Responsibility

Teaching your teen about money management is an important step in their education. The financial lessons you teach now can help them grow into responsible adults later in life. Now is the time to help your teen build credit, and here are a few ways to do it.

Instruct Them to Secure Employment

If your teen is old enough to get a part-time job, employment is a major step in building credit. Employment teaches hard work, a sense of independence and excitement about earning money. These are all valuable lessons that go beyond establishing credit.

Having a job doesn’t establish credit; however, you need income to apply for and get approved for credit cards and loans. Like your job history, your credit history may get stronger with time.

Your chances of getting a higher-paying job may increase with experience. Consider starting early with your job hunting.

Let Them Do Their Own Banking

If your teen doesn't have a savings or checking account, get them to Adirondack Bank to open one today. Discuss with a banking representative what options are best for your teen.

Teens can learn how to handle money by managing basic accounts.

We offer products and services to help your teen learn good savings and spending habits. Our Campus Checking has no monthly minimum balance requirements or monthly service charge. It includes a debit card and a new account opening gift. You must deposit a minimum of $25 to open an account.

If you want to teach good savings habits at an early age, we offer a Children's Savings Account. You must hold a minimum $10 balance and the account is interest bearing.

Share the Responsibility and Perks

Chances are you have one or more credit cards in your wallet. You can add your teen as an authorized user on one of your credit cards to help them build their own credit.

Having your teen as an authorized user can be a beneficial teaching tool but be careful. Set limits so your teen knows how much can be used each month, and make sure they are paying towards the bill.

After all, as an authorized user they are not on the hook for that credit card bill — but you are. After your teen has been an authorized user for six months, pull a copy of their credit report and show them what creditors see on that same report.

Be Strict About Rules

You know how important it is to pay your bills when they are due. It helps you avoid costly fees, and it helps bolster your credit score. Your teen needs to understand why you are so strict with bill payments and money deadlines.

You can show them the complexities and responsibilities of money management such as paying bills.

Be sure to teach your teen the consequences of poor credit. It's important your teen knows what happens when they carry too much debit and the mistakes to avoid.

Teach your teen what mistakes to avoid with money management and credit:

• Don’t spend more than you make.
• Don’t overuse credit.
• Don’t carry balances on your credit cards from month to month.

Become Financially Ready

You can achieve financial growth and success with Adirondack Bank's Financial Education Center. Understand your financial goals from budgeting, managing debt and paying for college. Some of our modules include:

• Paying for college: Discover smart ways to plan and pay for college.
• Building emergency savings: Learn how and why to save for emergency expenses.
• Savings accounts: Learn how to save money and the options available to you.
• Checking accounts: Learn about the features, benefits and functions.
• Credit Cards: Learn how a credit card works, what features to look for and how to manage one.
• Healthy financial habits: Learn how you can develop good financial habits.
• Creating a budget: Learn strategies and tips to stick to a budget.
• Family conversations about money: Learn about conversation topics, strategies, and best practices.

Adirondack Bank is here to help you gain the skills you need to make the right financial decisions. When you're ready to open a savings or checking account, visit your nearest branch for details. Our dedicated staff will help choose the product that's right for you!

The information in this article was obtained from various sources not associated with Adirondack Bank. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. Adirondack Bank is not responsible for, and does not endorse or approve, either implicitly or explicitly, the information provided or the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. Adirondack Bank makes no guarantees of results from use of this information.