For more information on MAFCU's youth account offerings, visit mafcu.org.

Graduation is just around the corner and many teenagers are woefully unprepared for their financial futures. Start your child off right by providing the necessary skills to prosper in the real world.

Open Checking and Savings Accounts
Having a checking and savings account is a key step toward independence – but to open one, a minor will likely need your help. Mid-Atlantic FCU offers the Young Executive Student (YES) program, where you as the parent or guardian are a joint owner until the child reaches legal age.

Your child can use the savings account to learn how to set aside cash for goals and emergencies, and the checking account to become accustomed to writing checks, using a debit card and managing money. You can help by explaining how to keep track of deposits, checks, withdrawals, fees and the legal and financial consequences of bouncing checks.

Develop a Spending and Savings Plan
A spending and savings plan (or budget) is the foundation for a healthy financial life. Taking the time to sit down with your teen and add up every net dollar he or she earns or is given in a month is a great way to start. Then total monthly expenses (including saving for goals) and subtract the sum from her or his income. If there is more going out than coming in, help your teen make sensible, realistic changes by evaluating ways to increase income or decrease expenses. MAFCU offers a helpful Monthly Spending Worksheet in the Learning Center section of our web site to help with this process.

Establish Credit
It is crucial to teach the wise use of credit early. Your young adult will need a glowing credit history to finance a vehicle, rent a home or secure a job. Explain the importance of paying bills on time, and encourage him or her to only use credit cards for short-term loans on amounts that can be repaid in full when the bill rolls in. Help your teen understand the dangers of intensive credit card marketing and promotions on college campuses and at retail stores, and how buying at a high interest rate can affect his or her financial future. You may choose to help your child establish credit by co-signing on an account. Before taking this step, make certain you consider the risks to your own credit if your teen defaults on payments.

Source: balancepro.net