More stash and less burn.
It’s summertime, and one of my favorite customer service questions is back in vogue:
“Can my teen get paychecks directly deposited to their FamZoo card?”
Yes! Look for the routing and account numbers on your teen’s Card Information screen. Have your teen submit those numbers to an employer, and paychecks will go straight to their card.
So, what does a typical teen do with all that extra summer cash?
Spend it. Duh.
Summer paychecks have a way of melting away like ice cream in the hot sun. iTunes here, Starbucks there. By the time fall rolls around — poof! The summer earnings are gone.
Time for a little “pay yourself first” parental intervention.
Tell your teen how a portion of your own paycheck automatically goes right to savings — like your 401(k) or TSP — and how they’d be smart to do the same.
Getting the classic teen eyeball roll response?
Try the dream-big angle. Ask your teen if they have any epic items they’ve been pining for. A guitar? A used car? Travel afar? Promote the payroll deduction as a great way to accelerate the goal.
Or, try the bribe angle. Consider kicking in some aggressive parent-paid compound interest to juice up their savings. Even better: if your teen promises to plunk some of the savings into a Roth IRA, offer a healthy match. It’s called a “Family 401(k)” arrangement, and I describe it in detail here. It’s one of the smartest financial moves I ever made for all five of my (now grown) kids.
Or, there’s always the nuclear because-I-said-so option. You just want to teach your teen the virtues of having an emergency fund, whether they like it or not. (Surely they’ll thank you later!) Mandated summer savings is a quick way to get that fund in place.
Once you’ve persuaded (or bribed or forced) your teen to accept your wise counsel, you can automate the savings “payroll deduction” in FamZoo as follows:
- Order a savings card for your teen to hold the accumulating deductions. Follow the steps here. (Tip: you can activate the card right away.)
- Set up an automated transfer from spending to the new savings account that slightly trails the timing of your teen’s paychecks. Use recurring checklist items to schedule the deductions as described here.
- Create a savings goal to show progress along the way. See the steps here.
By the time fall rolls around, your teen will have a sweet summer stash and, hopefully, a payroll practice that persists throughout adulthood.
Stash then spend.
Warren would approve of our teen savings payroll deduction tip:
“Do not save what is left after spending, but spend what is left after saving.” ~ Warren Buffett
Stash first. Spend second. Help your kids get the order right.
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Best to you and your family,