For teenagers, that first summer job is a major gateway to adulthood -- and the eye-opening realities that come with every paycheck.
Unlike chores and the occasional babysitting or lawn mowing job around the neighborhood, salaried employment gives young people their first real taste of the workplace and what earning a living may be like. Building money responsibility and financial independence is part of that picture.
Parents can help prepare teens for a job search and encourage smart money management once they're on the clock. Here are some ideas to get started:
Get your child's paperwork in order. Working teens will need their own Social Security Number (SSN) to legally apply for a job. They will also need a SSN to open a bank account to deposit their paychecks. Depending on state law, children under 18 may have to open bank accounts in their custodial name with their parents or guardians. It is also important for parents to check in with qualified tax or financial advisors about their teen's earned income, particularly if it may affect any investments under the child's name.
Encourage an early job search. U.S. youth unemployment has been a growing problem over the past decade. Parents might urge teens to research job opportunities months in advance of summer hire. Teens can reach out to friends, neighbors and other trusted adults about potential jobs in the community. Parents can help monitor job openings their children are interested in, encourage them to meet application deadlines and be aware of federal, state and local child labor laws.
Discuss job-hunting tactics. Adults and teens now search for jobs and apply online, so teens might consider adding leading employment search engines to track seasonal job openings. Also, it is never too early for teens to learn resume writing and job interviewing skills. The Practical Money Skills website's Landing a Job page offers useful background to help teens get started. Also, the U.S. Bureau of Labor Statistics offers web-based student resources that match job categories to skills and interests. Finally, parents should encourage teens to make smart contacts that could lead to work.
Explore teen training and certification. Teens should look for jobs that fit their interests, but training and certification in certain skills might make them more attractive hires wherever they apply. Such certification might include Red Cross training in first aid or CPR. Lifeguard certification may also be offered through local universities or swimming organizations.
Urge teens to leverage advanced skills. Parents should encourage teens to develop personal skills and sidelines in technology, art or subjects he or she can teach. These skills and hobbies can sometimes become part-time work that can be done year-round. Better still, suggesting your teen market such advanced skills might qualify him or her for future summer jobs or paid internships that look good on a college resume.
Introduce teens to banking. Parents don't need to wait for their child's first job to get them involved in banking. Many parents start bank accounts for their children when they start receiving their first allowance -- after all, digital banking makes it easier for parents to monitor and share money with the whole family. However, paychecks make banking more of a necessity. Parents should check with their bank to see what types of accounts are offered for children and teens -- some banks offer a wide variety of custodial accounts where parents can track their child's spending and saving activity.
Talk about budgeting, savings and investing goals. A teen's first job is a great opportunity to introduce budgeting, saving and long-term investment skills. Your child may be working during the summer to save for a particular desired item -- a cellphone or a trip -- or more long-term goals like college. Others may use their first earned income to start investment accounts. Consider urging them to save at least a minimum amount every week. Continue working with them to manage that money for a variety of purposes until they have learned enough skills and responsibility to take over. The Practical Money Skills site offers a budgeting tutorial and budgeting calculators for a range of purposes.
Review hiring documents and pay stubs. Getting hired means a flurry of paperwork that can be confusing. Parents should encourage their children to bring hiring documents home for review before signature. Most will apply to tax withholding, but such documents might also include special workplace agreements that might not always be clear to young workers. When that first paycheck arrives, it is also a good idea for parents and teens to sit down and inspect that first paper or electronic pay stub. Many people do not understand their withholding even as adults, so children can benefit greatly from this lesson at the start of their working lives.
Bottom line: A teen's first summer job can offer worthwhile lessons in money, workplace and life-planning skills. Parents can offer valuable guidance and suggestions to make sure their child has an educated start in the working world.
Jason Alderman directs Visa's financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney