Skip to Content
mom and teen son having an important money conversation

If you have a son or daughter who is about to graduate high school, congratulations! It’s a huge milestone for both of you. And whether they are planning to head off to college or go straight into the working world, there are several financial topics you’ll want to address with them first. Let’s take a look at the money conversations to have with graduating teens.

The Importance of Saving

If your teen isn’t already in the habit of saving a portion of the money they earn or receive as gifts, now is the time for them to start. Talk about the importance of setting aside money for emergencies, as well as starting to save money toward future milestones, such as purchasing a vehicle or moving into their own apartment. Those big moments can seem far away to them at this point, but explain that life happens quickly, and they will be facing those financial decisions sooner than they realize. mom and teen son having an important money conversation

The Danger of Easy Credit

College campuses are often the first place teens are exposed to the ease of applying for a credit card. And since they often have clean credit, many are approved on the spot. This easy access to credit can quickly spiral into the beginnings of unmanageable debt.

Before this happens, talk with your teen about how a credit card might feel like easy money, but is really a loan they must pay back — often at very high interest rates. Rather than letting them loose with a credit card, add your teen as an authorized user on one of your accounts. Or start them off with a secured credit card with a low limit. Either one is a lower risk way to introduce your son or daughter to responsible credit use. Check out these other ways young adults can establish good credit.

How to Recognize Predatory Lending

While you may recognize payday loans or car title loans as predatory lending, an inexperienced consumer of financial services might not. At first glance, they seem like a harmless and convenient way to make up for a cash shortfall. But explain to your teen the fees, exorbitant interest rates and revolving spiral of debt these types of loans can cause, and advise them to never get caught up in that cycle.

Avoiding Financial FOMO

Whether starting college or entering the working world, your son or daughter is about to meet many new people from all walks of life. As they expand their social circle, financial FOMO (or fear of missing out) is almost inevitable. If your teen expresses jealousy or the desire to have what others have, talk to them about focusing on their own goals and what’s important to them. Explain how it will always seem someone else has something more, bigger or better, but constantly trying to match other people’s lifestyles is a quick path to frustration, not to mention a lifetime of debt.

Pitfalls of Borrowing and Lending Money

Borrowing (or lending) $20 here or there might not seem like a big deal, but it can become one quickly when one party neglects to pay it back. Explain to your graduating teen how borrowing or lending money among family and friends can create resentment and damage relationships. If your son or daughter does choose to lend someone money, let them know they have to be OK with the possibility of their friend not paying it back. Also let your teen know there are other ways to help someone who is struggling financially that may be even more helpful than lending money.

Related Posts

Summer Vacation Canceled? Try These Staycation Ideas.

The ongoing coronavirus pandemic has changed what summer vacations are going to look like this year. Non-essential travel is still discouraged, and many popular vacation destinations are still closed. Even those that slowly re-open will have limited capacity and restrictions on certain activities. At the same time, we could all use a break now more […]

Read More

5 Financial Lessons to Learn from Minimalism

Do a quick online search for “minimalism” and you’ll find everything from an artistic movement to a style of decorating to a type of capsule wardrobe. The fact is, the concept of minimalism can mean different things to different people. But despite its varying interpretations, at its core, minimalism is about living with less. So, […]

Read More

How to Prioritize Bills When You’re Low on Cash

It happens sometimes. Despite your best efforts to budget and save, you come up short when it comes time to pay bills. It’s unsettling, to be sure. But it doesn’t have to mean the start of a financial freefall. With a little planning and strategy, you can get through the lean time to come out […]

Read More
Font Resize
Contrast

Call 866-528-0588

Or schedule a call now
Please complete the required fields to continue.
Now Later