Summer’s here, and your teen has landed their very first part-time job. How do you ensure they’re ready for that first paycheck and all that comes after?

If you’re wondering where to start, there are five steps you can take as a parent to help lay the foundation for future financial independence and good finance habits – we’ll detail them below.

1. Help Your Child Get a Checking Account

If your child just landed their first job, they’ll probably need a checking account if they don’t have one already. A checking account allows your child to set up direct deposit for their paycheck and gives them the freedom to begin spending that money on items of their choosing.

While you may opt to open a joint account with a younger teen, if your child is 18, they can open an account solely in their name. While this can be a scary step, it’s an important one that will help your child begin building a sound financial future.

Banks often have options designed for just this stage of a young adult’s life – where they must balance practicing independence with learning to manage finances responsibly. At First Merchants, that is our Carefree Checking account, which offers free paper statements and no monthly maintenance fees until the account holder turns 25.

With a new checking account – individual or joint – your child is ready to begin working and earning their own money.

2. Teach Them Good Savings Habits

Access to a paycheck can be very tempting for teens and young adults – which is why teaching them to save is essential.

Building a savings habit early on will help your child be financially stable further down the road and will help them be prepared for major milestones like purchasing a house, having children of their own, or retiring.

Talk to your child about setting aside a portion of their paycheck into a savings account in their name. It can be a relatively small amount – even just $5 or $10 – to help them build a habit. You can also encourage them to set savings goals if they want to make large purchases, save up for college, or plan a special trip after graduation.

If your child doesn’t already have a savings account, there are student- and teen-friendly options, like First Merchants’ personal savings account, which is free for teens under 19 – or free for young adults with a regular monthly transfer. Savings accounts are available in a teen’s name if they are 18 or older, but a joint account with a parent can be opened at any age.

3. Set Up Safety Measures

However, just because your child is moving towards a more independent lifestyle doesn’t mean they’re without support or guard rails.

Talk with your child about setting up account security measures, such as account alerts, so that they can keep their paycheck and savings safe.

Be sure to go over basic safety – such as keeping cards in a wallet or secure location – as well as common fraud pitfalls they may encounter while out with friends or shopping online and information security and password protection.

Account alerts can be an excellent safeguard against many scam attempts if your child re-uses an old username or password, leaves their account logged in on a shared device, or is affected by a data breach. Alerts can be sent to your child’s phone and e-mail – as well as to yours – if someone makes a login attempt, makes a large purchase, or uses their card outside a set geographical region. You can even get alerts if their account balance goes below a certain amount.

You can also have your teen opt-in to overdraft protection, which will draft from a savings account should your child overdraft, or automatically decline a purchase if there aren’t enough funds to cover it.

4. Help Them Build Credit

If your teen is 18 or older, it might be a good time to talk with them about building up their credit score. If your child isn’t old enough for their own credit card, you can look into secured credit card options.

A secured credit card requires you, or your teen, to pay a specific sum of money as a safety deposit. That amount is then used as the card’s credit limit – so if you pay a $300 safety deposit, your credit limit would be $300.

A secured credit card still collects interest, so it needs to be paid off every month, but it’s a relatively worry-free way to build credit. Learn about First Merchants’ credit cards—including secured card options.

This option can allow your teen or young adult to begin building credit history while still safeguards, which can minimize the risk of them racking up debt early on.

5. Teach Them Money Management Basics

Perhaps the most important thing you can do to help your teen become financially independent is to teach them the basics of money management. This includes foundational skills like budgeting and “old-fashioned” skills like balancing a checkbook.

Yes, even if they don’t have a checkbook, it’s still a worthwhile skill. Managing a check register – or some other transaction tracker – will help your child understand what’s in their account instead of training them to rely on an online banking balance, which may not reflect unprocessed transactions.

If your teen is 18 or older, they can use online bill pay through our mobile app or online banking platform to cover phone bills, car insurance, or other recurring expenses.

And, if your child is still in high school, encourage them to take financial wellness classes if available. You can also bring your teen into one of our welcoming local banking centers to talk to an attentive banker about the dos and don’ts of personal finance – we’re always here to help you prosper.