Money Skills Every High School Graduate Should Know

Learning doesnt stop after high school, especially when it comes to financial lessons that will set the stage for financial freedom for years to come.

If youre getting ready to send your child off to college, the military or straight into a job, set them up for success by ensuring that they know the following money skills:

How to Use Credit Wisely
Getting your first credit card after high school isnt impossible, but it can be difficult. Parents can help by adding their child as an authorized user on their own credit card. This is a great way to help build your childs credit by continuing to pay your bills on time. Just remember that your own bad money habits could negatively impact your childs credit score, as well”so make sure youre in a good position before adding your child as an authorized user on your credit card.

The ultimate end goal is for your child to get their own credit card and begin building their credit score by paying bills on time and not carrying a balance on the card. This will likely lead to a higher credit score, which will pave the way to better rates on loans”and to better credit card terms.

How to Create (and Stick to) a Budget
As your child prepares to fly the coop and become financially responsible, teaching him or her how to keep track of the amount of money that comes in”and where that money is being spent”is a good way to show them where their money goes. It will also go a long way toward showing them if theyre spending more than they earn. Budgeting is a lifelong skill that can also help your child stay out of debt by teaching them to cut out extras so that they can afford to buy basic necessities.

There are many ways to create a budget, so play to your childs strength and take advantage of pen and paper, a computer spreadsheet, or one of many budgeting apps that are available today.

How to Manage a Checking Account
While your child may never write a physical check, opening a bank account and knowing how to balance a checkbook are important skills when it comes to money management.

To truly set your child up for success, turn off overdraft protection to avoid fees and enforce budgeting”and set up low-balance alerts. Banking apps can help with a lot of this, so be sure to take advantage of everything your bank offers.

How to Safely and Securely Make a Mobile Payment
Your children most likely already know more about money-transfer apps than you, but as a parent, its your job to remind them of the security steps they should be taking when making mobile payments. If they havent done so already, help your child set up multifactor authentication, as well as a pin”and remind them to only engage in mobile payments with people they know.

The Importance of Setting Up a Retirement Account
If your child is heading out into the corporate world and jumping into a full-time job, theyll most likely be given the opportunity to open a retirement account by their new employer. Whether their funds are matched or not, its important that your child understand the value of compound interest so that they can see how their money grows over time.

Published with permission from RISMedia.