Money management for teens

Dana Sumter learned early what's involved in managing a bank account.

When Sumter was 10 years old, she opened her first account with a CD given to her by an aunt. Sumter's parents then required her to deposit half of her Christmas money.

Now 18 and a senior at Columbia High School, Sumter saved enough to buy a car from the paychecks she earned working two jobs over the summer.

"It's important to keep track of credits, debits and fees," Sumter said.

Sumter has learned about the ins and outs of bank accounts as a student in the Academy of Finance at Columbia High.

The program - tailored to students considering careers in business and finance - offers classes in bookkeeping, accounting, banking and investing.

Education, bankers say, is key to increasing the number of South Carolina households with savings and checking accounts.

According to a federal study, South Carolina has one of the lowest rates of bank use in the country.

About 35 percent of S.C. households either don't have a bank account or use banks only for cashing a check or savings, the Federal Deposit Insurance Corporation recently reported.

Nationally, about 25 percent of households either don't have accounts or don't use them to obtain loans and mortgages.

A bank account is key to an individual's financial well-being, the bank industry says. With an account, people can cash checks and save for emergencies and long-range goals.

Those without bank accounts usually turn to more expensive financial services, including check-cashing stores, pawn shops and buying money orders.

High school is a good place to teach teens about money, said Jackie Meggie, who teaches the finance academy courses at Columbia High.

"We need to start making sure in our classes that we talk to these students early on before they get these part-time jobs," Meggie said.

Bankrate.com, which compiles finance and rate information for the banking industry, reports that less than half of high school seniors - 45 percent - have a checking account; one out of four has neither a checking nor a savings account.

Another study by the Jumpstart Coalition, which promotes financial literacy among teens, found that about one-third of high school seniors use credit cards. By college, 78 percent of students have credit cards with an average balance of $3,200.

Understanding the basics of personal finance is important, Bankrate.com reported, because mistakes like a bounced check can be costly.

"I went over my account by $1, and the bank charged me $25 in fees," Sumter said. "You've got to watch the banks."

Having an account is a "big responsibility," said Nick Springs, 17, one of Sumter's senior classmates at Columbia.

Springs opened his first account when he was 12, using it to save money earned from doing chores.

"It's a big responsibility that you don't think about if you don't have it," Springs said. "You've got to keep up with all your money, see where it's going and how much you've got."

Having a savings goal is important for learning how to manage money, the students said.

For example, Jasmine Hammett, 18, who opened her first bank account last summer, is putting money away to buy a plane ticket to see her father in New York.

"Be careful with your money because it does go out really fast," Hammett said.

Dominique Doctor, 17, said his goals are more immediate.

"I'm saving to cover my senior fees," Doctor said, referring to cap-and-gown rental and the price of a senior yearbook.

Sumter and her classmates probably are more savvy about personal finance than most high school students, Meggie conceded. But she added that all teens must be prepared to take care of their finances.

"We have to ... make sure that our students learn all the basics where managing money is concerned, and the importance of saving money and setting goals," Meggie said.

"In these times, it's very important."