Preparing for Adulthood

A Financial Checklist for New Grads & Parents

Graduation season is a time for big smiles, proud families, and exciting new beginnings. For teens and high school graduates, it marks the end of a chapter and signals the first real transition into adulthood. It is also the time when real life money decisions become more personal.

Many young adults are just starting to manage the expenses of rent, phones, transportation, meals, and more. These can come with a bit of sticker shock for an unprepared teen. That is why graduation is the perfect time for parents and teens to evaluate their financial situation.

Here are a few things parents and teens can do to ease the transition.

Review Existing Youth Accounts

Some new graduates may already have a youth bank account. Graduation season is a good time to review any open checking and savings accounts.

If you aren’t sure where to start, here are a few questions to ask:

• Will my teen’s checking account automatically convert to a new “adult” account or does it require the account holder to request the change?
• Can the account holder remove the parent or guardian from the account?
• Who are the beneficiaries on the account?
• Will any special youth perks change?
• Will rates on interest-earning accounts change?

Budget and Save

A simple budget can go a long way for a new graduate. Start by listing how much money is coming in from a job, allowance, gifts, or other sources, along with any regular spending. This gives a clearer picture of where money is going.

Saving should also be a priority. Even saving a small amount at first builds a healthy habit. A small emergency fund can help cover unexpected costs like gas, school supplies, or a broken phone, for example. Get started with this simple budget sheet.

Build Good Money Habits Early

Tracking spending is one of the easiest habits to build. When young adults learn to pay attention to where their money goes, they are more likely to make better decisions. This can be done in a notebook, budgeting app, or spreadsheet. Many financial institutions also offer budgeting tools in online banking. Learn more about Community First’s Personal Financial Management Tool.

Separating wants from needs can be challenging, but it is essential to keeping a budget. Young adults who are new to managing their finances may need help understanding the difference at first. Wants are the extras, like eating out or shopping for fun. Needs are the essentials, like transportation, groceries, or school supplies.

It is also wise to educate new graduates about debt. Review how interest works, and how credit cards can and should be used wisely. It is helpful to introduce credit scores, and the benefits of building credit early. Teens who are just turning eighteen are often not aware of the benefits and potential pitfalls of credit card usage. They will also likely need assistance building credit, which is where secured credit cards are a good introductory tool for new graduates.

Financial Checklist for New Graduates

Here are a few practical next steps for teens and high school grads:

1. Make a simple budget for the next month.
2. Review any checking or savings accounts already opened. If you have a teen checking account, understand the process for converting to an adult account. Some financial institutions do this automatically, while others allow the account holder to request the change. Once you are the sole owner of the account, it is a good idea to understand how interest earned may change, and review or add beneficiaries.
3. Start saving a little from every paycheck or gift. When you build a saving habit, you’ll be surprised by the difference it makes as you grow older.
4. Track spending for at least two weeks. A simple excel sheet is a great place to start, or find a handy app.
5. Learn the basics of credit, loans, and interest. A foundational knowledge on these three things can have an empowering effect on your financial life.
6. Plan for upcoming expenses over the next 6 to 12 months.

Establishing a Banking Relationship

Age 18 is an exciting time to establish a banking relationship if this has not been done already. Here are few financial products that can help young adults start building their financial know-how:
 

• Checking account (sometimes called a spending account). This account is most often used for everyday purchases and bill pay. Discover the benefits of a Community First checking account.
• Savings account. This allows you to set money aside for emergencies. Many savings accounts earn interest, which can help the balance grow over time. This is a great motivator for building good saving habits. Learn more about Community First savings accounts here.
• Special purpose savings account. This makes budgeting and planning easier and more rewarding. A special purpose savings account can be used to save for a car, a trip, or almost anything!
• Secured credit card. This is a valuable financial tool that not only provides access to funds but helps build a credit profile for future borrowing needs. Discover the Community First Visa Platinum Rewards Secured Credit Card.

Moving Into Adulthood with Confidence

Graduation is exciting because it opens the door to new opportunities. It can also feel overwhelming because so much is changing at once. That is why financial preparation matters so much. It gives new adults a sense of direction and helps them feel more ready for what comes next.

Nobody expects a recent graduate to know everything right away. But learning the basics, making a few smart choices, and staying aware of money habits can make adulthood feel less stressful. Preparation now can lead to more freedom later.

Community First Can Help

If you or your teen aren’t sure where to start, Community First can help. We can introduce you to products and tailored solutions that work for any phase of life. Contact us today or find a branch near you!