A Financial Checklist For Every High School Graduate

When your son or daughter graduates from high school, one of the first things he or she needs to start thinking about is money. Often, it’s the first time teens start handling financial matters by themselves. They need to learn how to pay the bills, budget their income, and deal with things such as credit cards and insurance.

Responsible parents want what’s best for their children, and that includes teaching them how to make savvy financial decisions. We offer some steps you should take in order to help your teen learn how to make the best choices when it comes to money.

Create A Budget

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After you child graduates from high school, it’s time to talk about expenses and whether you or your teen will be covering items such as room and board, the phone bill, transportation, and insurance. Create a simple spreadsheet by hand or use a budgeting app on a smartphone.

Teens who leave the house are often surprised by the cost of food, particularly if they don’t cook very much and order a lot of takeout. It’s worthwhile for them to practice while living at home first and to remember that items like spices and oils also cost money.

Set Up A Bank Account

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One of the first things you need to teach your teen is how to balance a check book. Avoid using overdraft protection so your son or daughter learns about budgeting and how to avoid fees. This will also teach him or her about how high fees can become. Help them by setting up low-balance alerts and installing the bank’s app on their smartphone.

If you contribute some funds to your child’s account, make sure the transfer is seamless and doesn’t involve fees. Also, check to see how long it takes for the money to transfer to your teen’s account.

Teach Them How To Properly Use Mobile Payment Apps

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A lot of teens are familiar with money-transfer apps such as Venmo. They enable them to send money to anyone they choose instantaneously. However, it’s easy to make a mistake with these apps, and it can be hard to fix problems in an instant.

To avoid a headache, set up multi-factor authentication and a PIN. It’s important to stress that your teen should not use the app to pay someone they don’t know. Your teen should ensure they are paying the correct individual when they issue a money transfer.

Warn Your Teen About Identity Theft


Make sure your teenager uses strong passwords that hackers will have a difficult time deciphering. Also, ensure that they don’t use the same password on multiple websites. Identity theft is a big problem that needs to be taken seriously. It can also happen if your teen leaves items such as their social security card in their purse or wallet, and it is stolen.

In addition, tell your teen not to reveal his or her social security number unless it’s absolutely necessary. When a form requires it, leave it blank and see if it’s really needed.

Have Them Take Charge Of Health Insurance & Doctor’s Appointments

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Start tasking your teen with making their own doctor’s appointments. Also, let them fill out the forms they use at the doctor’s office. Many kids stay on their parent’s insurance until the age of 26, but you may want them to contribute to the deductible. Also, they should know what the co-pay amount is for each visit.

Many teens also need to learn about filling a prescription. They need to be responsible for their own health care, particularly when it comes to refills of essential medications. Give them the correct insurance cards and account numbers.

We all hate taxes, but we all have to pay them.

Inform Them About Taxes

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When your teen gets a job, they will typically need to fill out the Internal Revenue Service’s W-4 form in order to receive a proper paycheck. Make sure your son or daughter knows what the form is and what kind of taxes they must pay.

The IRS has instructions that can help you fill out the form. If your teen gets a paycheck with too much or too little money, you can revise the form to ensure that they are paying the correct amount in taxes to avoid end of year surprises.

Set Up A Roth IRA For Retirement


It’s never too early to start thinking about retirement. The sooner your teen starts saving money, the better it will be for them in the long run. Teach your child about compound interest and show them how much more money they will save if they start socking money away at an earlier age.

Set up a Roth I.R.A. that can be used for decades and will not be subject to taxes during retirement. You can start a Roth I.R.A. with very little money, and it gets your teen on track with saving money early on.

Consider Making Your Teen An Authorized User On Your Credit Card

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It’s not uncommon for teenagers and young adults to have problems with their credit cards. One issue is they may occasionally miss a payment. They may also not realize how late fees stack up over time. To help them out, get an “authorized user” credit card in your child’s name.

Your regular payments will accrue on their blank credit report. But be aware: companies have different rules, such as the age an authorized user needs to be or how much the annual fee is. Some also penalize teens if their parents are late in paying the bill.

Freeze Your Child’s Credit

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In a bid to combat identity theft, Equifax, Experian and TransUnion allow children under the age of 18 to freeze their credit. This means creditors can’t open a new account in your child’s name because they are unable to check his or her credit. The goal is to prevent thieves from trying to impersonate your teen.

It can be challenging to set up a credit freeze, but it may be worth it. You should be able to add your child as an authorized user on your credit card even if a freeze is in effect.

College is important, but it can be quite expensive.

Discuss Financial Aid For College

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If you’re teen is going to college, they may need to apply for financial aid. This involves filling out a Free Application for Federal Student Aid (FAFSA) form. A lot of information is needed for this form, including household income. Your child should be involved in filling out the form because he or she needs to sign it with you.

At this point, you can let your teen know how much money you and your spouse make. It will also help him or her think about the kind of lifestyle they want, the job they may be interested in, and what major will help make that happen.

Create A Student Loan Spreadsheet

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While your teen is attending college he or she may have more than one loan. It’s important that they are aware of the type of loans they have and what they will owe when they graduate and have to start repaying them.

Some federal loan information is available in the National Student Loan Data System. After a few years, your teen’s info will be listed in the database. You will need to contact your lenders for information about private loans. Compile all the information in a spreadsheet.

Teach Your Teenager To Spend Less Than They Earn

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It may sound like a no brainer, but it’s important to teach your teen not to spend more than they earn. This can be very difficult in an age where it’s so easy to charge things on a credit card. But this is not money that they have in their pockets. They still have to pay it off at some point.

Any excess cash your teen has every month should be put away and saved for the future. If you look at really wealthy people, they save or invest a lot of their money. They often do not spend more than they earn.

Make A Decision About Your Teen’s Health Data & Privacy

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After your child turns 18, they can legally make their own medical decisions. That can be problematic if your teen gets sick and you are unable to access information about them. If you want to maintain access to your child’s medical information or make decisions if they’re incapacitated, consider signing a health care power of attorney.

A HIPAA release also gives you access to your son’s or daughter’s medical records. This form helps because it gives extended access following a person’s death. Forms are provided online or through a university health facility.

Insurance is an important topic for a teen leaving home.

Talk About Automobile & Renters Insurance

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Contact your automobile insurance company to see if your vehicle is covered if your teen lives in a different state while attending college. Also, keep in mind that your teen may drive his or her friend’s car, so you probably want to keep them on the family insurance policy.

If your teen lives off campus, they may need to get renters insurance. Some homeowners insurance policies may cover this, but a separate policy may be a better option, particularly if you want to prevent your premiums from rising in the event of a theft or other issues.

Show Your Teen How To Tackle Debt

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Unfortunately, your teen may accumulate a lot of debt in a short time due to student loans, personal loans, or credit card debt. It can be overwhelming unless they have a plan in order to get rid of the debt. Make sure your teen knows in advance how to tackle the problem.

There are several ways to pay off debts – just make sure you choose a method that works well for your family. This may include a cut in spending, lowering interest rates, and/or increasing income.

Warn Your Teen About Spending Too Much On Credit Cards

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When used correctly, credit cards can help your teen build his or her credit score. However, they can also cause a lot of problems if they aren’t used properly. Make sure your teen knows how dangerous they can be, and advise them to limit the number of cards they use in order to avoid a lot of debt.

Also, make sure they understand how important it is to pay the balance every month. There are certain cards that are geared towards college students that offer benefits specifically suited for younger people.

Can your teen survive an emergency situation?

Advise Your Child To Build An Emergency Fund

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While many teens rely on their parents to help them out in a pinch, there may come a time when they require an emergency fund to help them get out of a sticky financial situation. This may involve an unexpected medical bill or a problem when his or her vehicle breaks down.

It’s great if your teen can set aside an emergency fund of approximately $1,000. Once they have a steady job and are able to start saving more money, they can increase the fund.

Make Sure A Teen Who Enlists In The Military Knows What Benefits They Can Receive

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The Army, Navy, Air Force, Marines and Coast Guard lay out their salary and benefits online. If your child enlists in the military, make sure to find out the following by asking an experienced enlisted person: What benefit is the best, and which one do you wish you had known about or started using sooner?

Keep in mind that the government’s Thrift Savings Plan helps enlisted people prepare for retirement. Also, the Consumer Federation of America has an initiative to help people devise financial goals and make plans to accomplish them.

Don’t Forget The GI Bill

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If your child decides to enlist in the military, they have the option to take advantage of educational benefits, such as the G.I. Bill, which helps pay for vocational training and higher education.

Qualifying Veterans and their family members can get money to cover all or some of the costs for school or training, according to the US Department of Veteran Affairs. If your child serves at least two years on active duty, they may qualify for benefits under the Montgomery GI Bill Active Duty program.

Encourage Your College-Bound Teen To Get A Part-Time Job


If your teen is going to college, they may want a little extra spending money to use at the movies, on pizza during late-night study sessions, and on other activities. Many colleges have jobs on campus that are pretty easy, including checking student IDs or working at the library.

These jobs often only involve a few hours of work each week. They’re useful and help your teen pay for things he or she may otherwise not be able to afford. Plus, your child won’t need a car or public transportation to get to the job each week. These jobs can also help pay off tuition.