5 Ways to Help Your High School Graduate Achieve Financial Independence
Personal finance concepts are often as foreign and confusing to your teen as their slang is to you. We got you, fam.
Whether it’s saving for a car, heading off to college, or receiving their first credit card offer, your teenager is likely facing many new financial decisions. And, often times, personal finance concepts are as foreign and confusing to them as their teen slang is to you. Are you providing the financial guidance they need?
Consider these five simple tips when prepping your grad for the real world. In other words: we got you, fam.
Teen Financial Tip #1: Make that bank account their Bae
If you haven’t already, help your teen set up their own checking and savings accounts. This will allow them to practice adulting, while gaining necessary experience in the basics of managing their money, such as tracking purchases.
Encourage them to use tools and resources that will help them along the way, such as online and mobile banking, overdraft service and email notifications that alert them when their checking account is running low.
Teen Financial Tip #2: Help them develop a fire budget
Following a budget is one of the most lit financial skills you can teach your teen. There are free websites and apps available to help them get started, such as Mint, You Need a Budget (now free for students) and Wally, to name a few. Features include income and expense tracking, identifying needs versus wants, and insights about spending habits.
Teen Financial Tip #3: Teach them to slay at saving
A critical element of financial independence is saving money. Rather than running to you when times are tough, teach your teen the value of saving for an emergency. Establishing a savings account that they contribute to regularly will help form good habits as well as discourage them from using a high-interest credit card or going to a payday lender when they’re short on cash.
Teen Financial Tip #4: Warn them to avoid a YOLO attitude about credit
Make sure your high school grad is prepared for when the credit card offers start showing up in the mail. Discuss what a credit score is, ways to use credit responsibly and how to avoid credit card debt. Explain that if they can’t commit to paying off their balance each month, it’s probably best to avoid credit cards for now.
Teen Financial Tip #5: Caution them not to go cray with their spending
Responsible spending is key to financial independence; however, most teens haven’t mastered this skill IRL just yet. Encourage your grad to control their spending by suggesting the 50/30/20 method. This approach allocates 50 percent of their income to needs/necessities, 30 percent to wants, and 20 percent to savings.
The Zions Bank Student Banking suite of products includes Anytime Checking, a Visa Debit Card and digital banking tools that make it easy for teens to manage their money. Visit our website or stop by your local Zions Bank branch to learn more.
Ali Hardy is a freelance writer for Zions Bank.