Do teens need to learn to balance a checkbook?

Once your teen opens a checking account it becomes pretty apparent that she needs to learn how to balance a checkbook. Or does she?

Most of us just don't write many checks anymore. A Federal Reserve study in 2016 showed a sharp decline in check writing over the past decade and a half. In fact, a lot of the activity in a typical checking account is made up of anything but checks (debit card transactions, automatic deposits and withdrawals and the like).

So if we aren't writing checks, are we balancing our check registers in the traditional (old-school-way-that-mom-did-it) sense? A lot of people aren't. Once I thought about it, I realized I wasn't either. I love the time saving features of online banking and personal finance software and I'm even warming up to some of the mobile cash payment apps.

Still, checks aren't going anywhere soon for a number of reasons. That means your teen not only needs to know how to write a check, but understand how and why money flows in and out of her account.

With that in mind my teen worked with a paper and pen register for a good long while before transitioning fully online. But that might not be your approach. However you tackle it, here are some resources to help you get started.

How to balance a checkbook
These instructions from NerdWallet are straightforward and can give your teen an idea of how and why balancing a checking account on a regular (if not monthly) basis is a good idea. The article also links to budgeting apps like You Need a Budget (YNAB) and Mint.

Personal finance software
Even if you still somehow manage your finances on paper (don't worry, it's our secret), your teen won't. Here's a comparison of personal finance software from InvestorJunkie and a few more from nerdwallet).

Deeper Dive: CashCourse by NEFE

You'll find this post most helpful if
- you're a parent with an older teen or new college student.
- you're looking for a one-stop solution for boosting your teen's financial literacy and you're wondering if CashCourse fits the bill.

Things to know
- CashCourse is a free, online financial literacy resource for college students, created by the nonprofit National Endowment for Financial Education (NEFE). Take a video tour (under two minutes) to get an idea of the look and feel of the program. It's easy to set up a free account and go through the materials even if you're not affiliated with a participating college or university.

- The material is written with college students in mind so some of the topics like buying a first car, managing financial aid and paying for a wedding may seem a little abstract for younger teens. If your teen's college experience is in the near future, a lot of the content will be of interest.

- Once you familiarize yourself with the broad topics to see if they cover what you and your teen are interested in (see below), you can hand the laptop or tablet to them, so there is no need to create a curriculum from scratch (although I recommend ongoing family discussions about topics covered).  There are a few exceptions that you might want to know about. Financial Roadmap for Parents is somewhat oddly inserted under Save & Invest, but most content is directly created for your teen/young adult.


Things I like
- Topics are arranged in a logical order: Earn, Save & Invest, Protect, Spend, Borrow and Pay for Education. There are also some handy tools that can be used along with the topics or on their own. like easy-to-use financial calculators (favorites of mine: "How long will it take to pay off my credit card(s)?" and "How will payroll adjustments affect my take-home pay?"). The Budget Wizard is easy to run and easy to customize. The Financial Experts section of the site gives users a chance for some Q&A with folks who know their stuff when it comes to financial independence.

- The course covers things I might not have thought to include if I were putting a list of topics together on my own, like budgeting for an unpaid internship and calculating your future salary. I want my teen to love his chosen field, but I also want him to go in with eyes wide open as far as potential earnings if he decides to be, for instance, an itinerant poet versus an electrical engineer.

- If you and your teen are already well into the college and financial aid process the information included in Pay for Education might be too basic. Otherwise, it's a good introduction to the topic.

- The discussion on the pros and cons of credit and debit cards goes into a little more detail than I've seen in other sources (for instance, explaining that your teen can be held accountable for $500 worth of unauthorized purchases if you do not report a debit card theft within 48 hours). But I still like this 8 minute video from a different source as a very general tour of the general differences between the two cards. If you're using CashCourse as your primary tool for financial literacy, maybe throw in that video as well for some context and variety.

- Risk and reward is covered minimally, but I think it's a good concept to work into any discussion about saving and investing. Side note: in the two years (2012 and 2015) that the Programme for International Student Assessment (PISA) has measured financial literacy, which includes the concept of risk, 15 year olds in the U.S. have been stunningly...average. More worrisome, the results showed that about 22% of our teens don't reach a baseline level of proficiency. (Here are the 2015 rankings by country, if you're interested.)

- Consequences of not paying your bills and five things to know if a debt collector calls are both topics that I haven't seen elsewhere but are covered (briefly) here.

- I just love the way the tricky concept of credit score is presented. "Think of your credit score as a kind of financial GPA: Your goal is to keep improving it, and then maintain it when it’s the highest you can achieve."

- Generally speaking, I like the wide variety of topics covered here, from the costs of owning a pet to what to think about if the plan is to study abroad.


Things I'm not crazy about
- Some of the advice doesn't match up with my own experience, or with what I tell my teen. For instance, when it comes to negotiating salary increases, CashCourse suggests "instead of waiting for your company’s routine review period, ask for a bump up in your salary right after you have accomplished something valuable for the company." Hmmm. I think it's great to ask for an increase if you feel it's merited. But there's no sentence after this one that explains the realities, particularly in large companies, of salary bands, scheduled performance reviews and other compensation quirks of corporate America. In other words, my advice would be to go ahead and ask, but understand if the answer is "no" that isn't necessarily a reason to head for the nearest exit in a huff.

- Information specific to investments is short and sweet. But if that's an area your teen is particularly interested in there are a lot of other resources available. CashCourse lists a few and you can find more in the Capital Markets section of one of my earlier posts.

- There are several sections that seem more like collections of (very) loosely related articles versus a cohesive plan. You'll find advice about adding staples to your Amazon.com order to save shipping under the Fraud section. Huh?  The section about auto insurance actually only has content on health coverage. Whoops. Still, I like that there is a lot of basic starter-type of information about insurance (health, life, renters, etc.) there for young adults to work through.


Bottom line
Since this site is geared toward older teens and college students, the topic-oriented approach they take (versus a linear, curriculum type of structure) is probably right on target. It's more like the menu approach I used in an earlier post. So while I think it could potentially be a little overwhelming for a 14 year old, a student heading off to college in the fall might find it to be just what they need.

Final note: if you liked CashCourse you might also like another NEFE resource, 40 Money Management Tips Every College Student Should Know.




Start here: The #FinLit Menu for Parents

When my son entered his teens I started to get serious about financial literacy in a way I should have been years before. 

The good news is there are many resources out there for parents to use as they work through concepts with their kids. That's also the bad news. The number of websites, worksheets and articles can be overwhelming.

Let me clarify though, most resources are designed for use in schools. That's great, but I was looking for tools to use at home. Some of my parenting friends were in the same predicament, so as I found resources I shared them. Eventually I decided to put them in one spot - right here. (Note: scroll down to skip the rest of this intro and go right to the menu.)

If you are at a similar place in your personal finance journey with your teen, this list might also be helpful to you.

A few things to keep in mind:

- This was creating with teens (middle school to early-high school ages) in mind.
- I originally started with a list of resources I'd used with my own teenager, but it's grown now to include resources that I have not used personally.
- Personal finances are just that - personal. Knowing that, I'm offering up this list as a helpful tool, not as a recommended path for your family or your kids.
- All of the resources shown below are FREE.
- This list isn't exhaustive by ANY stretch. I've missed stuff, plus I've left off a number of sites that were just a little too boring or complex (in my view).

This is a "menu" because it's intended to be something you can pick and choose from as you see things you like. However, if you'd rather have a complete curriculum with minimal muss and fuss, you'll find resources that are "plug and play" at the end of this post. As a bonus, after that you'll find short reviews on a few financial games & apps I've come across in my journey over the past few months. 

This list will probably change as I discover (or you share with me) better or additional resources. I hope you find this helpful!

- Kimberly



Checking
Will your teen be writing checks as a young adult? Probably not many according to some sources. But they should still know the basics.

Helping your teen manage a checking account
Publisher: Better Money Habits, powered by Bank of America and Khan Academy
Seven minute video geared toward parents (not your teens). Most of this info will be old news to parents of older teens, but if you're just starting to consider opening a checking account with your child this is a good primer.

How to write a check in six easy steps
Publisher: nerdwallet
Short online demonstration. Have your teen read the brief FAQ section below for the things not addressed in the demo.

How to balance a checkbook
Publisher: nerdwallet
Short online demonstration. Another lost art form will be manually balancing a paper check register. But the concepts are still important, even if your teen opts to track transactions via an app versus on paper.

10 ways to protect your checking account
Publisher: Discover.com
Infographic. I actually had no idea what a skimmer was until reading this. Get more info on that particular topic from CreditCards.com here: Gas station skimmer theft rising

7 bank fees you probably don't know about
Publisher: nerdwallet
Article. Short and to the point, and covers some of the fees you might forget to talk to your teen about (and the bank probably won't mention them when they are opening the account).

Note: Not everyone has a checking account. If you're in one of these households, I know some of the links above won't be helpful to you. If you have any resources you think other parents would benefit from knowing about please send me a note.

Savings
6 minute video with relevant info. You might want to watch it first to see if it will be engaging for your teen.

Publisher: Practical Money Skills, by VISA
Worksheet based. Designed for grades 9-12, covers financial skills like managing salary, buying a car and avoiding debt. We worked through selected lessons, like Lesson 4 (Cost of College).

FINRA Foundation also produces a series of lessons on earning interest for middle school students.

Publisher: SaveandInvest.org by FINRA Foundation
One minute video. A little silly but short and sweet. Encourages an emergency savings fund equal to 3 months of expenses. 

Publisher: Practical Money Skills, by VISA
Worksheet based. Scroll down to Lesson 19.

Biz Basics: The Rule of 72
Publisher: DardenMBA
4 minute video, super easy to follow and a great tool for teens as they think about earning interest on savings.
Note: For an easy-to-use Rule of 72 calculator see TheMint.Org.

Budgeting
Publisher: Practical Money Skills by VISA
Worksheet based, Lesson 9.

6 steps to help a middle or high school budget 
Publisher: Bank of America
Short article, just the basics with a few ideas for the types of expenses a middle or high school student might pay (cell phone bill, etc).

4 Best Personal Finance Apps for 2017
Publisher: Investopedia.com
Does anyone keep a budget on a piece of paper anymore? I don't, although I haven't taken the leap to using an app for that quite yet. But my teen is much more comfortable using apps than I am. Investopedia lists these four as the best out there right now for personal finance. 

Credit
"Credit and Debit: Two very different cards"
Publisher: Bank of America
8 minute video, easy to follow explanation of the difference between credit and debit (with pros and cons for each).

Publisher: SaveandInvest.org by FINRA Foundation
Single page infographic. Cost of credit card debt. 

Teaching teens the true cost of charging
Publisher: Bank of America
Short article for parents
Article. Brief overview of the five C's of credit (character, capacity, capital, collateral, conditions).

Publisher: SaveandInvest.org by FINRA Corporation
Worksheet. Deeper dive into exactly what's included in your credit score. 

How to build a credit score from scratch
Publisher: Bank of America
3 minute video, tips for ways teens (and others) can build credit.

9 things you need to know about prepaid cards
Publisher: Creditcards.com
Article. Good detail if you're considering a prepaid card for your teen. 

Capital Markets
How the stock exchange works (for dummies) 
Publisher: Kurzgesagt in a Nutshell (YouTube)
3 minute video, interesting and good overview of the worldwide securities marketplace. Just ignore the references to euros. 

Initial Public Offering (IPO)
Publisher: Teensguidetomoney.com
Article, deeper dive into initial public offerings. 

Mutual Fund Definition
Publisher: teenvestor.com
Article, good primer on the concept of mutual funds.

Building Bridges
Publisher: Federal Reserve of St. Louis with the SIFMA Foundation
5 minute video, overview of bonds with an emphasis on how cities and governments participate in the bond market.

What is a bond?
Publisher: WSJ.com
Article, break down of terminology and types of bonds including corporate, Treasuries, Savings Bonds.

10 money terms to understand if you want to be rich
Publisher: BusinessInsider.com
Article. I don't love the title but I guess "10 money terms to understand if you want to be financially literate" isn't as sexy. Still, there are some good definitions in here including APR, dollar-cost averaging and FICO scores.

What's the difference between the NYSE and the Nasdaq?
Publisher: Visual Capitalist
Infographic. 

Economics
What gives a dollar bill its value?
Publisher: TED-Ed
3 minute video about money supply, inflation and the Federal Reserve. Additional resources available on the site.

Inflation - The Economic Lowdown Video Series, Episode 9
Publisher: Federal Reserve Bank of St. Louis
4 minute video about inflation rate, Consumer Price Index (CPI), how the Federal Reserve works toward price stability and maximum employment.

Publisher: TED-Ed
4 minute video about economic bubbles and tulips! Additional resources available on the site.

For older teens interested in questions about the economy, productivity, money supply and stuff like that, hand them this book. Updated in 2010 some parts are ever so slightly dated but the writing is very approachable and big picture. Full disclosure: my teen did not read the entire book, but focused instead on chapters that were particularly interesting, like Chapter 2, "Why you might be able to save your face by cutting off your nose (if you're a black rhinoceros)."

Spent
by McKinney for Urban Ministries of Durham
Online simulation (launched in 2011) that's easy to use, great for teens and up. Players navigate through 30 days on a limited wage, dealing with issues like health care, rent and food choices all on an extremely limited budget. To keep the conversation going, use this series of questions created by Next Gen Personal Finance (NGPF) once your teen has completed the game. 


Plug and Play #FinLit Resources

Designed for teachers but access is free, so parents can pull up resources and links. 

Publisher: National Endowment for Financial Education (NEFE)
NEFE has produced a wealth of free resources for financial education. See the next entry for more about their offerings. Cash Course is designed to be used in colleges and universities, although they allow you to create an account and use the materials even if you are unaffiliated with a school by selecting "School Not Listed" when you reach that point in the registration process. See my "deeper dive" post for info on how you might use this with your kids.

Publisher: NEFE
Free online courses about personal finance with topics ranging from saving to insurance. Not specifically written for teens (see NEFE's program Cash Course above for something geared toward middle and high school ages). NEFE also offers the High School Financial Planning Program (HSFPP) as a free, comprehensive curriculum designed more for classroom settings although their site says it can also be used for workshops and one-to-one settings.

Publisher: Wells Fargo
Offers free, online, self-directed resources for anyone interested in learning more about money management, including one designed specifically for teens. 

Publisher: VISA
Designed for grades 9-12 and free, I've used select modules for my teen. It's worksheet based versus online and interactive. There's a lot more than worksheets at Practical Money Skills. It's one of my favorite resources so please do check it out. See my "deeper dive" post for more details on how to use this with your kids and teens.

The Mint
Publisher: Northwestern Mutual
Separate sections provided for for "kids" and "teens" as well as parents and teachers. This site goes over a lot of the basics but is very dated. The section for college age students (TheMintGrad) looks more current. See my "deeper dive" post for more details on how to use this with your kids and teens. 


Fun and Games
Publishers: VISA, NFL
NFL-themed video game developed by Visa. Choose between three skill levels, use money management skills by answering financial questions to move down the field and score touchdowns. Visa also offers a 2014 FIFA World Cup™ Brazil-branded version.


Designed for use by teachers in a classroom setting, but it's online so can work for you at home as well. Developed for middle and high school students, it teaches personal finance skills (including things like investing in a 401k, supply and demand) in a game setting. I only attempted 2 of the 16 missions. I found that I really needed a pen and paper handy to simplify the process of keeping clues and notes handy. It may be too detailed and slow-moving for younger teens and tweens. It will depend on the type of game your teen likes, but its got a lot of good info and is definitely worth checking out. 

Interactive strategy game designed to help players learn how to spot and avoid investment fraud. Players actually take on the role of fraudster. The theory is that "once you know how the bad guys operate, you can outsmart them at their own game". This is something to check out if your teen is interested in the topic. My 15 year old found the game play frustrating (he played the app version) but liked the chance to play as the "bad guy."

Publisher: SaveandInvest.org by FINRA Corporation
This game was designed with members of the military and their spouses in mind, but the concepts are universal. The goal is "to successfully manage your money throughout life, until you achieve your Big Dream. To win, keep careful track of your finances, pay your bills on time, and take care of all the little day-to-day things that can impact your finances." Teens may lose interest after a few rounds, but I liked the chance to get the realistic and detailed budget and unexpected life events in front of my teen, even for one session of game play.

Counting Money
Publisher: Warren Buffet's Secret Millionaires Club, Genius Brands Intl, Inc.
Quick and easy way to help your kids and teens figure out how to make change, whether that's at a lemonade stand or their first official job. Because many of our transactions aren't in bills and coins these days, it's also helpful to give them an overall "money sense" so they can tell when they are receiving correct change in a cash transaction. See my separate "deeper dive" post about this resource for more details on how to use this with your kids and teens. (link to follow)






Start here: The #FinLit Menu for Parents

When my son entered his teens I started to get serious about financial literacy in a way I should have been years before.  The good new...