Prepare Your Teen for Financial Responsibility After Graduation
As a parent or guardian of a recent graduate, you likely have many things you want to do with them before the end of summer. Before summer ends, be sure to add talking to your graduate about money management to your list.
Talk to them about Money Management
Make sure to discuss these 5 topics with your young adult before they get started on their own.1. Teach them basic banking skills & topics that can include:
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- How overdrafts work and how to avoid them
- How to use an ATM and how they are charged for using them
- How to write checks
- How to deposit checks (in-person and using a mobile app)
- How to make person-to-person transfers.
2. Create a budget. Ideally, your child should already have a budget and understand the importance of budgeting. If not, it’s essential they learn the skill before they leave home. Show them how a budget allows them to track spending habits, and how this can lead to better financial decision making.
Now is a great time to get started developing a budget. How much of your child’s living expenses will you cover when they leave home, and how much do they need to earn through working in the summer, holding a part-time job, or covered through savings or loans?
3. Teach them to borrow responsibly. Your child may have to take out student loans to help pay for college. Make sure they understand the debt they’re taking on, how it can impact their finances later, and why they should only borrow what they need to pay for education-related expenses.
Now is a great time to get started developing a budget. How much of your child’s living expenses will you cover when they leave home, and how much do they need to earn through working in the summer, holding a part-time job, or covered through savings or loans?
3. Teach them to borrow responsibly. Your child may have to take out student loans to help pay for college. Make sure they understand the debt they’re taking on, how it can impact their finances later, and why they should only borrow what they need to pay for education-related expenses.
4. Avoid the credit card trap! In addition to student loans, college campuses allow credit card companies to solicit your child. It’s important they know not to sign up for every card they see and understand how credit works and what responsibility they’re taking on if they choose to open a credit card. Before they get a credit card and start to build a credit record, talk with them first about using credit wisely. Opening a credit card can be a good opportunity for young adults to establish credit in their name, but many students need coaching on how credit cards work.
5. Help them get into the habit of saving. College doesn’t have to be all about spending. Now is a great time to talk to young adults about setting short and long-term saving goals. In addition to their bank account, they can have a savings account to set aside money for an emergency fund and goals such as buying a car or a down payment on a house.
We want to see your child have a successful financial future like you. We are here for you and your child throughout their next journey in life!
Flatwater Bank has proudly served our local communities since 1902. To open a checking account or learn more about any of our products or services, contact us, or visit one of our locations.
