Benefits your teen gets with a bank account.
Key takeaways:
- Learning good money habits early helps set up teens for financial well-being as adults.
- A teen bank account can help teach real-world money skills like budgeting, saving and responsible spending before high-stakes financial decisions arrive.
- Features like mobile banking and parental controls make managing money accessible and transparent for both teens and parents.
- Combining the 50/30/20 budgeting rule with a teen bank account can make budgeting tangible and repeatable.
Your teenager is navigating a world where money moves at the speed of a tap or swipe. Yet, according to Greenlight, nearly 75% of teens opens in a new window lack confidence in their knowledge of personal finance. A Nationwide Retirement Institute opens in a new window survey also found financial advisors are counseling their Gen Z clients (age 18-28) more frequently on basic budgeting and building healthy spending habits. It doesn’t have to be this way. It’s possible for your young adult to learn these skills before they leave home.
Here are four ways a teen bank account might help.
1. Budgeting becomes real with their own account.
A budget is simply a plan for how money comes in and goes out. The 50/30/20 rule recommends putting 50% of your money toward needs, 30% toward wants and 20% toward savings. For teens, “needs” might include school supplies or gas money, while “wants” could be concert tickets or eating out with friends.
Having their own account makes this framework tangible rather than theoretical. With the 50/30/20 budget, if your teen earns $100 a week, they could set aside $50 for needs and $30 for wants, then see exactly how everyday purchases affect what’s left.
| Weekly Earnings | Needs | Wants | Potential Savings |
|---|---|---|---|
$100 |
$50 |
$30 |
$20 |
Watching real dollars come in and go out of their checking account helps teens understand trade-offs in their spending and develop discipline that sticks.
Explore student banking for your teen.
2. Savings features turn goals into progress.
Research from the Consumer Financial Protection Bureau opens in a new window shows that youth who develop strong financial habits early are better prepared for adult financial well-being. Student bank accounts with separate savings or goal-tracking features, like SmartSave or Round Up, allow young people to set aside money for priorities like a new phone or their first car. While their checking account helps them see how quickly everyday spending can drain their balance, a separate savings space highlights the payoff of patience and planning.
Some accounts let teens earn interest, a small percentage that the bank pays you for keeping money in your account. While the amount may be modest, watching a balance grow on its own introduces the concept of making money work for you. Mobile banking apps often include features that let teens track progress toward their target amount, reinforcing the connection between patience and reward.
3. Mobile banking fits how teens already live.
Teens often expect to manage life from their phones, and banking is no exception. When choosing an account, look for one with a user-friendly mobile app that matches how your teen already uses their phone. Ensure it supports digital wallets, like Apple Pay® and Google Pay™, for tap-to-pay checkout.
The Commerce Bank Mobile App offers these and other features like mobile deposit, which lets your teen snap a photo of a birthday check and add it to their account without visiting a branch. It also includes tools, like Zelle®, that let users send and receive money from family or friends. Built-in features also include balance alerts that notify your teen (and you) whenever a purchase is made, creating transparency without hovering.
4. Low-stakes mistakes now can prevent costly ones later.
Mistakes are part of learning, and a teen bank account keeps the stakes low. One common misstep for those new to managing money is overdraft or spending more than the available account balance. Many banks provide optional services like Overdraft Transfer, which moves money from a linked account to cover all overdrafts that day for a fee. But learning to watch their balance now means they’re less likely to face unnecessary charges later. When missteps happen, you have the chance to walk through what went wrong together.
How to help your teen open an account.
Opening a bank account with your teenager is more than a financial transaction. It’s an investment in their confidence, independence and future stability. The skills they build now can shape how they handle money for the rest of their lives. A simple framework like the 50/30/20 rule, practiced through their own account, can give them a repeatable roadmap for every paycheck they earn.
Want more guidance like this to help your teen build real money skills? Speak with a Commerce Banker about opening an account, or sign up to get practical insights, simple explanations and resources delivered directly to your inbox as new content becomes available.
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