It’s Graduation Season!
This topic is especially meaningful for me because my own son is graduating from high school this month. Like many parents and grandparents, I’ve found myself thinking about all the lessons our children need as they take their first steps into adulthood. While we spend years helping them prepare academically, graduation is also the time when many young adults begin managing their own finances, making important decisions, and navigating the real world on their own. Here are moves I think every high school graduate should consider as they prepare for the next chapter...
Open a Savings Account — and Actually Use It
One of the best habits a young adult can develop is saving consistently, even if it’s only a small amount at first. A savings account can help fund emergency expenses, travel plans, their future apartment, that car they've been eyeing, and other fun and unexpected opportunities. Encourage your graduate to set up automatic transfers from their checking account to savings. Even $25 or $50 per paycheck can create a habit that lasts a lifetime. Learning to save before spending is one of the most valuable financial skills they can develop.
Start Building Credit Carefully
I despise credit cards, but building credit and practicing using a credit card responsibly can make sense for young adults. A credit score may seem unimportant at 18, but it can affect many future milestones, including renting an apartment, financing a vehicle, and even qualifying for lower insurance rates. A few ways to start building credit include:
Becoming an authorized user on a parent’s credit card Opening a beginner credit card Using a secured credit card
The most important rule is simple: only charge what you can afford to pay off each month. Responsible credit use now can open doors later.
Learn How to Budget Without Making It Miserable
When some young adults think of budgeting, they think restricting every purchase. In reality, budgeting is simply understanding where your money is going so you can make intentional choices. It doesn’t have to be complicated. Getting comfortable with tracking income, savings, bills and everyday spending will create awareness and build confidence with money. All easily done with a spreadsheet, notebook, or simple budgeting app. Find ways to make it fun!
Put Basic Legal Documents in Place
This is one of the most overlooked items for new adults. Once a child turns 18, parents generally lose the ability to access medical information or make decisions on their behalf, even in an emergency. Consider discussing a health care proxy, HIPAA authorization and even a Durable Power of Attorney. These documents allow trusted individuals to assist if a medical or financial emergency arises. While it’s not the most exciting graduation checklist item, it may be one of the most important.
Start Investing Earlier Than You Think You Need To
One of the greatest advantages young adults have is time. Even modest contributions made in their late teens and early twenties can potentially grow significantly over the years thanks to the power of compounding. The goal isn’t to become an investment expert overnight. It’s simply to understand that starting early can make a tremendous difference. If your graduate has earned income, it may be worth exploring
Roth IRAs Employer-sponsored retirement plans Basic investing principles The benefits of long-term investing
Final Thoughts...
While we can’t teach our children everything before they leave home, we can help them build habits that will serve them well for years to come. Graduation is more than a celebration of academic achievement, it’s the beginning of financial independence. By learning how to save, budget, build credit, protect themselves legally, and invest for the future, young adults can take meaningful steps toward financial confidence and success. And as always, we are here to help!
