There’s truly nothing like the moment your teenager receives their very first paycheck. Whether they’re lifeguarding at the local pool, working a part-time gig in retail, or babysitting during the summer, earning money for the first time is a significant milestone. It’s also a fantastic chance to instill smart financial habits right from the get-go.

At Banterra Bank, we understand how crucial it is to support teens — and their families — in building a solid foundation in financial literacy. In this guide, we’ll take you through some practical steps to help them manage their money confidently, appreciate the importance of saving, and steer clear of common financial traps.

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1. Understand The Basics Of Financial Literacy

Financial literacy is all about having the know-how and skills to handle your money smartly. For teenagers, it’s crucial to grasp the difference between what they need and what they want, get a handle on how banking operates, and cultivate the self-control to save and spend wisely.

According to the Council for Economic Education, less than half of U.S. states required personal finance education in schools before 2024. However, that number has seen a significant increase since then, with more than two-thirds of states now making personal finance courses a requirement for high school graduation.

Even with this positive change, many parents and guardians still feel the need to step in and help their kids become financially savvy for the future.

Banterra Tip: Looking for a head start? Swing by your local Banterra branch with your teen and have a chat with our experienced team. We’re always here to answer your questions and offer straightforward, helpful advice—no pressure, no complicated terms.

For more, check our blog “Financial Literacy Month: Finance Basics Everyone Should Know”.

2. Open A Checking Or Savings Account Made For Teens

The best way to learn is by getting hands-on experience. Opening a bank account for your teen not only gives them a taste of managing their own money but also instills a sense of responsibility.

What To Look For:

  • Low minimum balance or no monthly fees
  • Debit card access that comes with parental controls
  • Convenient online and mobile banking options
  • Ability to set up direct deposit from their job

Checking Vs. Savings:

  • Checking accounts are for everyday spending — things like gas, snacks, or a night out.
  • Savings accounts help set aside money for goals and emergencies.

Banterra Tip: Banterra provides youth and student-friendly accounts equipped with tools to help cultivate good financial habits from an early age — plus, our Digital Banking makes managing money a breeze.

3. Teach Them How To Budget A Paycheck

Once that paycheck lands, it’s time for a game plan. A simple budget can help teens stay in control and avoid blowing their entire paycheck on fast food or concert tickets.

Try The 50/30/20 Rule:

  • 50% for essentials (gas, school supplies, snacks)
  • 30% for fun (shopping, streaming subscriptions, outings)
  • 20% for savings

Example:

If your teen earns $400:

  • $200 → essentials
  • $120 → fun spending
  • $80 → savings

4. Start The Conversation About Credit

Credit might seem like a far-off topic, but the sooner your teen gets a grasp on it, the better off they'll be.

Key Concepts To Teach:

  • What a credit score is and why it’s important
  • The dangers of overspending or missing payments
  • How interest works on credit cards

When your teen hits 18, think about introducing them to a secured credit card or a student card with a low limit and monitored usage. This way, they can start building their credit safely.

Banterra Tip: Don’t forget to ask about our credit-builder products and how you can guide your teen on their credit journey responsibly — while keeping some safety nets in place.

5. Set Realistic, Age-Appropriate Financial Goals

Teens are more likely to stay motivated when they have a clear goal.

Sample Goals:

  • Save $150 for concert tickets
  • Build a $500 emergency fund before college
  • Save $2,000 for their first used car

Use The SMART Method: Specific, Measurable, Achievable, Relevant, and Time-bound.

Banterra Tip: Create separate savings accounts for different goals and automate transfers — so saving happens before spending.

6. Talk About Safe Spending And Online Scams

As digital natives, teens are comfortable online, but that doesn’t mean they’re protected.

Teach Them To:

  • Avoid sharing banking info over text or social media
  • Be cautious of “too good to be true” ads or giveaways
  • Recognize phishing emails and texts
  • Be wary of impulse buying in apps or games

Banterra Tip: Set up account alerts so your teen receives a notification if their balance drops below a certain amount or a large transaction occurs. It’s a great way to build awareness.

7. Introduce The Idea Of Giving

Money isn’t just for personal gain; it’s a tool for good:

  • Encourage donations or volunteer contributions
  • Make giving part of the family budgeting conversation
  • This grows empathy and purpose alongside financial literacy

Not sure where to start? Visit GiveWell.org, they search for charities that have or improve lives the most per dollar – peer-reviewed and based on 60,000+ hours of research.

8. Normalize Family Money Conversations

One of the most impactful things you can do? Talk about money at home.

Try This:

  • Involve your teen in planning a family grocery budget
  • Let them help compare prices for an upcoming vacation
  • Share age-appropriate insights into bills, credit card statements, or savings goals

When money isn’t a mystery, teens grow up feeling more confident and less overwhelmed by financial decisions.

9. Let Them Practice And Make Mistakes

Teens learn best by doing. Give them space to make small money mistakes — like overspending on a video game — so they can learn and adjust without major consequences.

You might even consider matching their savings for a limited time or helping them set mini goals with small rewards.

Banterra Tip: Sit down once a month to review their account activity. Celebrate savings wins, talk through spending habits, and help them plan their next steps.

Frequently Asked Questions

Q: What Account Type Is Best For Teens?

A hybrid checking + savings account with no fees and parental access is ideal for early financial responsibility.

Q: Can Teens Build Credit Before 18?

Prepaid or secured credit cards might be options; consult a banker to understand age and consent requirements.

Q: What If My Teen Makes A Costly Financial Mistake?

Treat it as a learning opportunity. Help them analyze it, adjust goals, and move forward—without judgment.

Give Your Teen The Tools To Thrive

Helping your teen build healthy money habits now sets them up for lifelong success. Whether it’s saving for a car, learning how to budget, or starting to build credit, every step counts.

At Banterra Bank, we’re here to help your family navigate every milestone. From first jobs to first accounts, we offer youth-focused products and personalized support that make it easy to learn, grow, and thrive.

Ready To Help Your Teen Get Started?