Banking For Teens

~ Kalli Ellis

Reasons to get a checking account//debit card:

  • A checking account allows you to have a debit card which act as cash. This is helpful because now, in place of carrying around cash, you only need to carry around a thin little card.
  • When you use a debit card, all of your transactions are automatically recorded and sent to you at the end of each month in the form of a ▪️bank statement▪️, via mail or email.

Getting started

Opening an account:

In order to open an account, most banks require you to have 2 forms of identification, one having your picture in order to verify that you are who you say you are.

What to look for in an account:

Picking a bank to open an account with can be difficult. Try to find a bank that has no monthly fees, no minimum balance requirements, and no limitations on The number or method of transactions. Always keep these three factors in mind: convenience, service, & cost.

Pros & cons

~ Pros:

  • Checking account holders have access to online and mobile banking, ATMs, and the use of debit cards and checks to make purchases or withdraw funds from the account.
  • Many employees find checking accounts useful for ▪️direct deposit▪️
  • Most checking accounts in the United States are also insured by the Federal Deposit Insurance Corporation, or FDIC, which ensures an account holder that his money is safely stored at the bank.
  • When you have a debit card, you can easily make withdrawals by going to an ATM and following the simple steps on the screen, or by going to your bank.
~ Cons:

  • Many checking accounts come with an array of fees that an account holder may come across. Fees include monthly fees, ATM withdrawal fees from third-party machines (ATMs not owned by your bank), in-bank transactions fees, and over-the-phone transaction fees for using customer service.
  • Some banks also require minimum balances and charge a fee if the account balance is lower than the minimum.
  • Other disadvantages of checking accounts include ATM withdrawal limitations, potential ▪️overdraft▪️ fees, and debit card usage fees.

Your responsibilities:

As a debit card holder, it is your job to track your spending to ensure that you do not overdraft and incur any extra fees. You can do this by looking over the bank statements you will receive monthly from you bank, and by periodically checking the balance. Do your best to avoid overdrafting (because of the fees involved), and writing check for amounts higher than what you have in your account. If you ever lose your debit card, you will need to contact your bank within 2 business days to let them know what's going on; you’ll have to close your account and open a new one because someone may have your information and could pose as you, making purchases and so on. This is called identity theft.

Protect your identity:

Identity theft is the fastest growing crime in America These people use your Social security number and start credit in your name. This can ruin your credit

What to do:

Contact all banks and credit card companies where you have an open account and tell them what happened and file a police report so that they can begin a process to find the criminal. You can also contact the fraud departments at all 3 major credit reporting agencies so they are aware of the problem

Terms to know:

Direct deposit:
  • Instead of getting a printed check, from your employer, you can elect to have your money deposited directly into your account

Credit report:
  • Your credit report is a way for you and potential lenders, landlords, and employers to find out:

    • How well you pay your bills on time

    • How much you owe

    • What, if any, court judgements have been made against you

    • Other basic personal information

Fixed expense:
  • an expense that will be the same total amount regardless of changes in the amount of sales, production, or some other activity.
Variable expense:
  • an expense that changes according to production or, in some businesses, with changing weather conditions.
Discretionary expense:
  • a cost that is not essential for every-day life
  • Legal document that acts as cash
Monthly bank statement:
  • A way to track your spendings that is automatically recorded when you use your debit card, write a check, make a deposit, or withdrawal
  • can either be mailed to you or can be emailed to you
  • Includes: dates, ID for each transaction, transaction amount, interest earned, & fees charged