Whether working the register at a local restaurant, standing watch on a lifeguard tower, scanning tickets at the nearby movie theater, or — my personal favorite — a part-time teller, a teen’s first job is an important rite of passage.

The beginning of summer is a particularly exciting time for both kids and their parents as they take this milestone step. For teens, this is a chance to earn their own money, and to determine how best to spend it.

As parents, though, a child’s first job is a golden opportunity to introduce issues such as taxes and emphasize the importance of setting a budget. Creating strong financial habits now will serve your child for a lifetime.

Start with an earnest conversationRemember your first paycheck? Maybe you knew the difference between net income and gross income before you accepted your first job. But for many, that first check was met with an unpleasant surprise: You don’t get to keep all your money.

Before it gets to that point, help your child understand state and federal income taxes, payroll taxes, and other deductions. Give them at least a basic understanding of why taxes are taken out and what they are used for.

In the end, setting proper expectations will help them better manage their money and sidestep disappointment.

Introduction to bankingYou may have already opened a youth checking or savings account for your teen, perhaps as a place to stash all that birthday money from grandma. If so, great! The earlier your child is introduced to effective ways to manage their finances, the better.

If not, a teen’s first job is a perfect opportunity to help them open one. Youth accounts will help them understand the value of money—and make the most of the money they already have—as they begin paying their own bills and track their own purchases. A savings account will help them set money aside (and reduce the temptation to overspend).

Most youth accounts offer direct deposits and allow for easy transfers, so your kid can quickly and easily put money into savings. As a bonus, many offer higher interest rates than conventional accounts to encourage savings.

Help them set a budgetEven after taxes, that first check was glorious. Suddenly, you had hundreds of dollars and final say on how to spend it. How many kids spend every penny?

In addition to the value of work, the most important lesson for a teen in his or her first job is the power of budgeting. How much to spend? How much to save? These are questions that many adults struggle with, so it shouldn’t be a surprise if a teen spends wildly with a sudden infusion of cash.

But the road to a strong financial future is paved early.

Help them create a budget by tallying their mandatory monthly expenses, such as car insurance and fuel, and create a savings goal. A good target for savings is about 20% of their paycheck (but more is usually better).

Once you have helped them account for mandatory expenses and savings, create the “fun fund.” A healthy discretionary fund ensures your kid’s labor will yield fruit. Explain the consequences of overspending and the importance of setting aside savings first, but a fun fund ensures there is money reserved for the things they want, making responsible money habits less of a chore.

Sticking to those goals takes discipline, of course. And your teen may need your help along the way.

But creating good money habits now will pay dividends for a lifetime.

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