Your child’s high school graduation is a significant achievement in both their life and yours. As they take their first steps into the world as adults, they have a number of options to choose from. They may plan to attend college in the fall or consider working full-time. They might decide to join the military or plan to take a gap year to figure out what they want to do in life.
As parents, you may be ready to help them prepare, or you may let them find a way to cover their expenses on their own. Regardless of the approach you take, you can prepare them for what to expect. Talking to your child about finances may help them make better financial decisions, especially as they begin to rely on themselves.
Setting a Budget
Budgeting is a great step in taking control of finances. You can teach your child how to set a budget before their money needs to be separated from yours.
For example, you can conduct a budgeting exercise with them. Help them establish a budget based on their needs, such as paying for outings with friends or saving money for a purchase, etc. Alternatively, you could lend them a sum of money to buy something big, but charge them interest to illustrate the concept of borrowing costs. These exercises, while simple, can help your child start thinking about their financial decisions and the trade-offs that result.
Note: There are many budgeting apps and tools that can make it easier for a high school student to set a budget and track their money.
Prioritizing Spending
Setting a budget alone is not enough to achieve financial goals, and sticking to it is not easy either. It’s important to talk to your child about prioritizing spending. Clearly distinguish between necessary expenses to meet needs and unnecessary expenses to fulfill wants to help them categorize their spending.
Financial goals can also be established. You might ask your child to set short-term goals, such as saving money for a down payment on an apartment or a car. Then encourage them to put money aside to achieve those goals.
“Reviewing expenses can be a valuable process, and you may be pleasantly surprised when [your child] gains more independence and becomes more mature,” says David Haas, a private wealth planner at RPT Wealth Strategies specializing in retirement planning
Source: https://www.thebalancemoney.com/financial-tips-for-high-school-graduates-4140397
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