The Next Best Steps for Your High School Grad - Money Tip Tuesday

High school graduation day is a milestone for the new grad and the parent(s)! After the celebration, it’s time to discuss the real world, reality, and the next best financial steps. What would you say to your graduate? We have the answers to that question.

Links:

• Watch our Budgeting 101 Webinar now
• Get your grad up and running with a new checking account
• Check out TCU University for more financial education tips and resources! 
• Follow us on Facebook, Instagram and Twitter! 
• Learn more about Triangle Credit Union 

Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast.

CHOOSING YOUR COLLEGE/TRADE SCHOOL

Whether your new grad is heading off to college or a trade school, the next level of education can be expensive. The best way to pay is to save, avoid student loans as much as possible, and choose an affordable school option. 

Many young adults choose to attend their local community college for the first two years for general education (Gen Eds) courses, such as college English, college math, etc. The cost per course is much lower at community college, and this will save considerable money over two years (as in thousands). Plus, a local school means living at home to avoid dorm and food fees that many students incur during their first year away. 

How many times do new college students change their major? I know I did—and that cost me a couple of thousand to make up classes. The first two years at a community college is the perfect time to assess a career choice, and getting those gen eds out of the way at a lower cost per class is a smart money move. Most 4-year colleges quickly transfer new students and their credits—especially if the student has excellent grades!

A BUDGET IS YOUR NEW BEST FRIEND

Whether your new grad is off to work or school, it’s time to introduce the world of budgeting. A budget is simply a plan to tell your money what to do and should be prepared in advance (we recommend the beginning of the month).

Some young adults have few expenses, especially if they are still living at home—that’s okay; there will be fewer line items on the budget to manage. 

Why budget? It’s a life skill that helps adults manage their money, save for their future, and live more flexibly. For more information on budgeting, I recommend our Budgeting 101 webinar on our YouTube channel.

GET A JOB!

Even if your new grad is heading to college, a part-time job is a great way to earn some spending money for some social time. Students with part-time jobs do statistically better in school because they are required to manage their time better than those who are not working.

Many students pay for college while they are in college, and this is a brilliant money move—avoid student loans as much as possible and never take out loans to cover living expenses, such as room and food.

THE BANKING BASICS

If your new grad doesn’t have savings or checking (with a debit card), now is the perfect time to head to your local credit union to set up these financial basics. Many credit unions have online account openings, so you no longer have to go to a brick-and-mortar branch.

If you are uncomfortable explaining how checking or debit card transactions work, head to your local branch. Branch representatives will take the time to explain direct deposit and debit transactions and how to avoid overdrafts and associated fees. Even if you are very comfortable with this subject, visiting the branch may be a good idea. Hence, your young adult gets this information from a credit union representative. 

DON’T OVERSPEND WITH A NEW CREDIT CARD

Post-high school is a time for freedom—including spending. At 18, young adults are now eligible to apply for their credit cards, which means their world is about to open wide. 

When I was in college several years ago, credit card companies offered free t-shirts to those who applied. “Build your credit,” they said. While building credit is a good, responsible step, young adults need to consider the consequences of credit. Take time to explain credit and how credit can be adequate. The rule of thumb to follow: if the bill can’t be paid in full when it’s due, don’t spend the money on the purchase.

If you have any tips on this topic or ideas for future issues, please email us at tcupodcast@trianglecu.org. For more great content, be sure to subscribe to the Making Money Personal podcast wherever you listen to podcasts.