Commentary: How to raise a child to be a financially independent adult

Mike Pavell of Bank of America

Bank of America banking executive and father of two shares tips

Graduating from high school is a rite of passage to adulthood, and right now, families across Texas are in the throes of the college application process.

According to the most recent Texas Education Performance Report, more than 91,000 North Central Texas students made the transition in 2017 out of 334,000 statewide. This school year, more than 3 million U.S. high-school seniors are expected to graduate.

Nearly all of them will either head off to college, vocational school or start in the workforce, taking important first steps into adulthood. For the first time, they will also achieve a new level of financial autonomy and face money-management decisions on their own – decisions that could impact them for years to come.

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My wife and I are parents of a college junior and a college freshman, and we know first-hand that we play a key role in helping them get started on the right track.

In fact, it’s a good idea for parents to educate their kids on finances even before they graduate high school.

At Bank of America, we’re noticing a trend toward students establishing a banking relationship well before high school graduation. There are several factors contributing to this trend, including more students taking on part-time jobs, the rise of online shopping, and the acquisition of mobile devices, including digital wallets.

Whether your teen is currently in high school or has recently graduated, there are key subjects parents should teach and kids should learn. Strong financial futures are built upon a solid foundation early in adulthood.

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Financial Tips for Teens

• Budgeting. For many young adults, summer means a part-time job and a first source of income and it’s important for the newly employed to have at least basic proficiency in budgeting and tracking spending. This includes accounting for known and unknown upcoming expenses, from rent and football tickets to textbooks and burgers. For a refresher on budgeting tips, I recommend a free online financial education platform called Better Money Habits (

• Checking. Many teens start banking with a checking account, but not all checking accounts are created equal. When evaluating banking options, students should note which ATMs are on campus and near their dorm or apartment; whether their bank offers a mobile banking app; and what are the terms and conditions of the checking account. Some good features to look for include waiving monthly maintenance fees and preventing overdraft fees. Our Advantage SafeBalance Banking provides these features, which is part of what prompted MONEY Magazine to name Bank of America the “Best Bank for College Students.”

• Saving. To develop responsible saving habits, start as small as necessary. Even just depositing $20 each month, sticking to a specific, attainable goal is in itself rewarding. In addition, look for a savings account that doesn’t have any fees. For example, we waive the monthly maintenance fee on Rewards Savings for eligible students.

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• Credit. College is a great time to start building credit history, yet it’s also an area where students have buried themselves in debt in years past. It’s important for teens to understand how and when to use credit cards, to pay off their balance on time and in full and to never charge purchases they’re unable to pay back.

• Mobile apps. Technology has made it easier to keep tabs on bank balances. Since most teens are already wedded to their phones, make sure they download their bank’s app to ensure they’re set up for mobile banking.

Growing into financial independence can be a rewarding and empowering phase of early adulthood for students. Parents can do a lot to put teens on the right track.

Mike Pavell is Fort Worth Market President for Bank of America