One trap I am constantly trying to avoid in my work is what I would call the “specialist’s mindset.” It comes from studying a subject for a long period of time and manifests itself in several ways, including heavy use of jargon and terminology. Oh, and it also comes with a belief that everyone somehow has a similar level of knowledge about your specialized topic. This leaves the specialist wondering why you might get a quizzical look when discussing the merits of index investing compared to active management. It all seems so obvious, doesn’t it?

I had the gift of observing a “beginner’s mind” this weekend when I took my teenage daughter to sign up for her first checking account. She already had experience with a savings account but now it was time to move up to the big leagues. What I learned from this experience is how this one account ties together so many key financial concepts which can seem so overwhelming to a financial newbie. Let me explain. 

First, we were extremely fortunate to have the bank manager sit down with my daughter to walk her through all the facets of her checking account (thank you Vinita!). I tried to keep my mouth shut so it was strictly an interaction between her and my daughter. I occupied myself by keeping a list of all the concepts she covered during the account set-up process:

• Benefits of linking a checking and savings account (especially when you are getting a paycheck and can allocate a portion to each)
• Creating an emergency savings fund to cover life’s uncertainties
• Managing an online account effectively by creating alerts (we have an activity to help young people set up alerts)
• Explaining overdraft protection that this bank doesn’t offer in junior accounts
  • My daughter wasn’t comfortable with this concept (clearly the same gene pool!) and also opted not to have money transferred automatically from her savings if her checking balances were inadequate to cover a purchase.
• Protecting your account information
  • Don’t fall for email or phone call scams
  • Create a password that doesn’t match other passwords
• Using debit card at the point of sale and why you should chose credit instead of debit (here’s what the WiseBread blog had to say about this topic).
• Fees associated with the account (fortunately no maintenance fee on junior accounts)

So, what did this all look like from a teen’s perspective. Here were her three reactions (and my reactions to her reactions):

• There’s a lot of stuff to remember to manage your money well!
  • The good news is that you have dear old dad and mom here to help so that by the time you head off to college you are going to be the “go-to” person who can help your friends.
• This seems so risky that someone is going to steal my money if I am not careful.
  • You need to be aware of all of the schemes meant to separate you from your money. You do need to be careful about protecting your password, not sharing your account information and being cautious. If you stay on top of your account and see anything amiss, contact your bank immediately. Banks have policies to protect you if the bad guys hack your account.
• Why does the process take so long to open an account (it only took 30 minutes which apparently seems like a lifetime to a teen)?
  • Lots of important information to share and to collect about you; banks want to make sure that you understand what you are signing up for, etc.

Stay tuned for reaction when I add her as an authorized user on my credit card (something tells me that I should let her settle in to her checking account for a few years first!) …

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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