This important milestone is often when young people first take control of their finances, make choices about various financial products, and develop the financial skills to learn what works best for them. Through work from our Youth Employment Success (YES) initiative, we know that youth employment programs are a unique opportunity to provide financial empowerment to young workers. We also heard from young workers about what matters to them when it comes to their money.
Whether you are a parent of a young worker or working for a program to support young workers this upcoming summer, here are some ways you can help them have a healthy financial start, courtesy of the Consumer Financial Protection Bureau
▪ A safe place for paychecks. Figuring out where to put your money can be intimidating, especially if you have never had a bank account before. Helping a young worker open a low-cost or free account at a bank or credit union is a great way to make sure that they can manage their money safely. Research shows that having a bank account is associated with higher levels of financial literacy in young workers.
▪ Getting the most from your paycheck. A young worker may have several different options available for receiving their paycheck. If the young worker has access to a low-cost or free bank account, direct deposit is often a free and easy way to deposit paychecks automatically into an account. Young workers may need to check with their employer or financial institution in order to set up direct deposit. Discuss with young workers what their options are and what the fees may be for each option to make sure they make the most of their paycheck.
▪ Managing cash flow. Having money to spend is a great feeling. It allows people to do and have the things that are important to them. Creating a budget can help young workers see how much money is coming in and where it is going. Helping young workers manage their cash flow can help them build the confidence to plan for and achieve the things that are important to them in the future.
▪ Saving for the future. Young workers are on the path to bigger and better things, and you can help to make sure that their money helps them get there. Saving, whether it be for college, a car, or an emergency fund, are all great ways young people can plan for their futures. The sun may be shining today, but a small amount of savings can help them be financially prepared for rainy days in their financial forecast.
Summer jobs are important opportunities for young workers to develop the skills and habits that lead to success. And while summer may be the time of year when most young people work, many continue to work throughout the year. Developing good financial habits early in life can help young people best use their money in ways that are important to them and help them plan for their futures.