Money Basics for High School Graduates and Their Parents


While many teens are adept at using the ATM machine, few are prepared to take control of their personal finances once they are ‘on their on’ at college. Particularly if your son or daughter is attending school far from home, it’s important that he or she be able to handle financial basics without your help. You don’t want to be fielding creditors or getting calls from your child asking for money for every incidental expense.


Here’s a strategy for getting them up to speed during the summer months so that they are ready to take responsibility once they leave for college.


·        Establish a spending account.  Set your children up with their own checking account and make sure that they know how to use the check register to track deposits, expenses, keep a running balance and reconcile the account monthly. 

·        Set up a budget.  Work with your child to establish a monthly budget for the summer. For a sample budget for college students, go to, click on the ‘Resource Center‘, then ‘Budget for College Students’.  Some of the items will not apply until your child actually goes off to college but this will get them used to working with the form.  Be sure to clearly define which expenses your child will be responsible for paying.  This might include clothes, entertainment, auto gas, and incidentals such as haircuts, and makeup.  

·        Have your child get a credit card.   As much as you might dislike this idea, credit cards, like the cell phone, are a necessary part of our world.  The key is teaching your children to use them responsibly.  The way to make this happen is to use a little trick I teach in my seminars.  Whenever you use your credit card, enter the charge directly into your check register just as if you had written a check.  Instead of writing a check number, write a ‘V’ for Visa or ‘M’ for MasterCard and subtract the expense amount directly from your balance.  This will allow you to accurately know how much money you have left until your next deposit.  Once your credit card bill comes, check off each item in your check register but do not subtract your credit card payment from your balance since this has already been done on an expense by expense basis.  You should insist that the balance be paid off every month and on time.  With this in mind, look for a card with no annual fees. To get a credit card for your teenager, talk with your local banker or go to the ‘Resource Center‘ at and click on ‘Best Credit Cards’.

·        Monitor the progress.  You may be very good at handling your own finances, but don’t expect perfection from your child, at least not initially.  Remember that much of this will be new to them and there is definitely a learning curve.  Be supportive and lavish with praise regarding their successes and understanding when they fall short.  We were all financially illiterate at some point.  Initially, I recommend that you meet with your child once per week to determine his or her progress. Focus on correct use of the check register and following the budget.  Once you see they are on track, meet once per month either during or after bank reconciliation.  Teens are so computer smart, you might recommend they use a software management system such as Quicken (

·        Offer a reward.  Let’s face it, budgeting and managing your finances is not fun for most people, especially teenagers.  But through extensive research, I have found that teenagers love to have extra money!  Offer a financial incentive for successfully following the program.  For example, give them an extra $100 per month if they maintain an accurate running balance in their check register and stay within their budget.


Kids are smart and they learn fast particularly if they receive encouragement and incentives.  If you really want to prepare them for success after they graduate from college, put some money in the budget for investing, then help them set up an investment account using a no-load mutual fund (check our TIAA-CREF Equity Index TCEIX).   Be sure to show them how to follow their fund’s progress in the paper or by going to