Having a High School Checking Account Is Very Important
Written by: Hans E.
During high school, it is important for kids to have a checking account at some point during their schooling. This is important because kids will realize how important it is to save money and start to track your savings and spendings. Kids will have to learn how to split their paychecks so that they are saving money and still have money going into their savings accounts for the future.
This graph shows the average amount each age group has in their checking account. Now this chart could be way off for our age group, however, it is a very large age group with peoples’ ages ranging from possibly 15 years or younger to 35 years old. Obviously the older you are, the more likely you are to have more money in your checking account because you can work full time and make more money than a high school student with a part time fast food job. Yes there are plenty of jobs out there for part time high school students that pay very very well, and there are also plenty of jobs that students work that may not pay that well. Now the issue with trying to find the average amount in a high school students checking account is that some kids may not have a job and earn money from their parents from doing work around the house or maybe even doing well in school and getting good grades. Other students may have a job and not be able to work a whole lot and only earn a little bit of money. Other students may have the ability to work more hours during the week and earn more money. Wages play a huge part in this as well. Obviously the more you make an hour the more money you will make in the long run and vise versa. However, there could be a student with a high paying part time job where he makes $10 an hour and only be able to work, let’s just say, 10 hours a week. There could be another student working a minimum wage $7.25/hr job and be able to work 25-30 hours a week. Now student one would be making $100 a week before taxes and student two will be making $181.25-$217.50 a week before taxes. Student one with the lower income will learn more lessons with saving money and spending money because he doesn’t make as much as student two does per paycheck. Student one will have to budget his money more and will have a harder time making decisions on spending his money. Student two however, may not learn as much because he has a lot more money available to him and he’ll be able to put money into his savings account and still have a pretty decent amount of money put into his checking account. This will allow him to buy more wants/needs or buy nicer more quality products. Going off of this, it is important for high school students to have checking accounts while they are still in high school because it can teach them very, very valuable lessons about spending and saving money based on the amount you make each paycheck. Students will learn how quickly they can spend money and eventually they’ll be able to get an idea of how much money they spend each week or month and compare that to how much they make and how much they actually save each paycheck or whatever period they chose to look at.
Another reason why it is important for high school students to have a checking account is because it can allow them to start investing money. This is a very valuable lesson because kids will learn another way to help themselves make some more money on the side. This can help them greatly in the future because when the stock market is up, the more money you have in stocks, the more money you can make just from having your money in stocks. Now the issue with this is, some students may be very very busy and forget to check up on the market and their stocks to make sure they are doing well and making sure they are not losing money. The most popular mobile app for investors is Robinhood. Currently this is the most trusted and most popular app used by mobile investors. Now obviously there are pros and cons to using this app just like any other website or app out there that involves spending and earning money. The three biggest pros to using Robinhood for mobile investing are: no account minimums, a streamlined interface, and cryptocurrency trading. This means you can have as little money as you want to in the app for investing. You could have as little as a penny in the app to invest if you wanted to. Since Robinhood uses a streamlined interface, it is very easy to use and there are functions there for you when you may need or want them. Having this ease of use is very very important because it helps with efficiency and the ease of use. The more efficient and easier an app like this is to use, the more likely more people will download and use the app. On the other hand, the three biggest cons are: no retirement accounts, no mutual funds or bonds, and limited customer support. With Robinhood not offering retirement accounts, people can’t invest money in a retirement plan to help them save up enough money so that they can retire when they please. With no mutual funds or bonds, if a company you are investing in for some reason goes bankrupt or loses a bunch of money and you lose money you invested in their stocks, you can’t get that money back in return as a result of that company or stock going downhill. With there being a limited amount of customer support, it may be hard for you to get in contact with someone on the customer support staff at Robinhood to get any sort of help you may need. This can be a major downfall for the company and may turn people away because some people rely on a strong customer support system so that they can easily be put in contact with someone if they need help.
Works cited
Davis, Chris. “Robinhood Review 2020: Pros, Cons & How It Compares.” NerdWallet, 5 Dec. 2020, www.nerdwallet.com/reviews/investing/brokers/robinhood.
Moon, Chris. “Average U.S. Checking Account Balance 2019: A Demographic Breakdown.” ValuePenguin, ValuePenguin, 2 Dec. 2020, www.valuepenguin.com/banking/average-checking-account-balance.
I really like your topic because I feel that it is underrated, but it is important to start learning about finances early in life and understand how they work for the future. Having a checking account allows you to easily make transactions to take out money and put money into the account. It makes your life a whole lot easier that just walking around with cash all the time. Also, as well as a checking account learning other valuable things like a savings account is also important and investing. Great Job thought you did a great job explaining why this is valuable!
ReplyDeleteI thought it was interesting on your chart that the average amount of money in someones bank account grows over time as they learn to spend less and save up money. Do you think that schools should be teaching kids more of how to invest and save money? I think that because most high school students will just spend their money on stuff without thinking about investing or saving. I think another big problem is most investing softwares want you to be 18 in order to sign up do you think that if they lowered it people would invest earlier?
ReplyDeleteGreat job using a graph to emphasize your point that kids benefit from having their own bank account, as well as being through enough to note that the age group could be outside of the specific reader’s age range. This article is really relevant to my life because I’ve recently gotten into stocks. I had money that was just sitting around, so learning to invest it smartly can help you in the future greatly. Great job also noting the positives and negatives to the app Robinhood. I trade usually with Etrade, but I now will take a look at Robinhood. This blog was very informative, which is important to people as they begin to be more independent with their economic decisions.
ReplyDeleteI really like this post, but I think another benefit of high school/student checking accounts is that they tend to have lower fees. At my current bank, my checking account has no monthly fees, plus I can use it until... about 2025, I believe, so I'm covered for a while. I do agree with Joshua, however, I think that investing is something that might best be done along with parents, as investing (certainly with Robinhood) can result in a lot of money being lost. But in all, I agree with this post.
ReplyDeleteI really like that you compared what the behaviors of a student who makes more money would do compared to a student who makes less money would do. (per semi-monthly payment) It puts into perspective on how important money can be to someone and how people want to have more money. I do think you could have listed more investment apps that would be substitute for Robinhood since you said how good it is to start investing at a young age.
ReplyDeleteI agree that learning how to save and manage your finances is extremely important to learn at a young age, when you don't have bills to teach you the hard way. I'm not sure if there is or not, but there should be a class in high school where you learn how to invest in stocks and use things along those lines to your advantage.
ReplyDeleteWow..this post was great! The depth was perfect and you did a great job explaining WHY kids need be saving in high school. I've personally had a really hard time saving my money for the future, I only realized how important it was when I lost my job and was left with nearly 0 dollars in my bank account right before Christmas. If I had saved money and actually put away large portions of my paycheck every other week I wouldn't have been put into that situation. I think that you bringing forth the idea of the difference in behaviors between someone with more and someone with less money was and interesting thing to include in your blog post yet it made so much sense and gives more insight to the economic standpoint of your topic to the reader. Overall, great job!
ReplyDeleteOne thing that I thought was a good thing to mention in this blog post was that by having a checking account as a teenager, it allows you to start investing at a young age. I completely agree that when a teenager is making around 200 dollars a week before taxes and they get there paycheck that it will help them learn how to save money. In my expierience I have learned over the years of having a job that the more money I make, the more money I end up spending. This makes me need to budget my money better, I always think, "I have more money, I can spend more" but learning to save your money earlier is very important, and I think that the sooner teens learn how to do that the better.
ReplyDeleteI've definitely heard mixed things about Robinhood as an investing website, especially for the uninformed user, but I agree that it is imperative for younger people to start a checking account and investing as soon as they have that steady wage and are still living at home, with less extra expenses that need to be paid for, depending on how independent your parents want you to be. It helps so much with being able to manage money when the consequences might not be as severe as they would be if they started making financial blunders when they have to support themselves alone.
ReplyDeleteI like your take on investing, however you neglect to mention what sort of vehicle they should use. Although Robinhood is a decent option, the main purpose of the app is for day traders who seek to make a quick buck. Not to mention the recent media backlash against the company for sleek tactics to make money. What sort of vehicle do you believe we should be usin at this point in our lives? Maybe a Roth IRA, traditional IRA...?
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