How to talk to your teen about money before their first job

Over 30% of teens had jobs in 2022, according to U.S. Department of Labor statistics
Published: May. 29, 2023 at 3:30 PM EDT
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(InvestigateTV) — More than 17 million teens were part of the workforce last year, according to the U.S. Bureau of Labor and Statistics (BLS).

Cherry Dale, a financial coach with the Virginia Credit Union, knows how exciting that first paycheck can be. That’s why she shares advice for parents with teens entering the workforce for the first time.

“So, I would highly encourage you to sit down and go through the tax implications of getting their first paycheck,” Dale said. “That, yes, they might get paid $15 an hour, $12 an hour, $10 an hour. But what is what are they actually netting at the end of the day?”

Dale also said it’s a good idea to have a conversation with teens about how they are getting paid. Many employers, especially for young students, might pay via a prepaid debit card. Dale said it’s important to make sure teens understand fees associated with them.

“It’s actually a really good time to open up a checking account or a savings account with your child,” Dale suggested. “And, you know, you can be both on there if they’re young and you can help them manage it, help them view their accounts daily, weekly, monthly to make sure they’re managing it well.”

Dale said a teen’s first paycheck is a great opportunity to teach them about managing money, creating goals, savings, and even giving back to the community through charitable donations.

The Consumer Financial Protection Bureau (CFPB) has free resources for teaching children and teens about money management and personal finance.