Teen Money

A checking account is for money moving through your life — it is spent, swiped and transferred. A savings account is for money standing still, usually paying a little interest while it waits for a purpose.

Most banks and credit unions offer teen or student accounts with no monthly fee, often with a parent or guardian as joint owner until you are 18. Credit unions are member-owned and often cheaper on fees; online banks often pay more interest but have no branch.

The two things worth comparing before opening anything: the fee schedule (monthly maintenance, overdraft, out-of-network ATM) and whether deposits are federally insured — FDIC for banks, NCUA for credit unions.

Keep the two accounts separate on purpose. Spending money and saved money behave differently when they sit in the same place.

Gross pay is what you earned. Net pay is what lands in your account. The gap is withholding: federal income tax, Social Security and Medicare (together, FICA), plus any state or local tax.

A W-4 form tells your employer how much federal tax to hold back. Fill it out carefully — too little withheld means a bill later, too much means you lent the government money free all year.

Your pay stub is a document worth reading: hours, rate, gross, each deduction, and year-to-date totals. Errors happen, and they are far easier to fix in the same month.

If you are paid in cash or as a contractor, no tax is withheld for you. That money is not all yours — set part of it aside.

A budget is not a punishment list. It is a plan you write once so you do not have to make thirty small decisions under pressure later.

Start with three buckets: money that must go out (phone, gas, anything you committed to), money you choose to spend, and money you move to savings first.

Pay savings first, not last. A $25 automatic transfer on payday survives; whatever is 'left over' at month end usually is not.

Review three months of actual statements before trusting your own estimate of what you spend. Memory is consistently wrong about food and subscriptions.

A credit score is a lender's shorthand for the odds you repay on time. It is built from your borrowing history, not from your income or your savings.

Payment history and how much of your available credit you use carry the most weight. Length of history, mix of account types and recent applications matter less.

Credit usually starts with an authorized-user spot on a parent's card, a student card, or a small secured card. All of them build history only if the balance is paid in full and on time.

Your score later prices a car loan, an apartment application, some insurance, and a business loan. Years of boring on-time payments are what make future money cheaper.

Published tuition is a starting number. What matters is net price: tuition, fees, housing and books minus grants and scholarships you do not repay.

Every school publishes a net price calculator. Running it for three or four schools before applying changes which list you build.

Grants and scholarships come before loans. Federal student aid starts with the FAFSA; many state and school awards use the same form and have earlier deadlines.

Compare the total four-year cost and the likely starting salary of the field together. The same degree at two schools can differ by tens of thousands of dollars in borrowing.

Nearly every scam needs one of three things: urgency, secrecy, or an unusual payment method. If a request has two of the three, stop.

Common ones aimed at young people: fake job offers that send a check and ask you to wire part back, 'get paid to hold money' mule schemes, gift-card demands, crypto doubling offers, and account-verification texts.

No legitimate employer, bank, government agency or family member needs gift cards, crypto, or a wire in the next ten minutes.

Verify through a channel you find yourself — the number on your card, the school's official site — never the number or link in the message.

Investing means buying a share of something productive — a slice of companies, most often through a low-cost index fund — and letting time do the work.

Compounding is growth on top of previous growth. It looks slow for years and then does most of its work at the end, which is why starting early beats starting big.

Risk is real: prices fall, sometimes for long stretches. Money you need within a few years does not belong in the market.

If you have earned income from a job, a custodial Roth IRA is one of the strongest starting places — contributions are made after tax and qualified growth comes out tax free later.