CEO Shares Financial Tips for Parents of Recent Grads
Theresa Mann, President and CEO, Shares Financial Tips for Parents of Recent High School Graduates
June 23- When I was 18, the month of June meant high school graduation, beach week, my summer job and (lucky for me) a new/old car that my parents bought for me. It also meant transitioning from being taken care of to taking care of myself. My parents loved me, but I would soon realize that they forgot to teach me what to do with the money that I had, would continue to earn and need to spend. They sent me to college with a wallet full of cash, a bank account that I could not access and very little knowledge about checking accounts, credit cards or what happened when the cash ran out.
Times have changed and today’s banking options are very different, with more banking done remotely than in a branch. Consider these tips before your high school graduate leaves the nest:
- Open their student checking account at the same institution where you do business, and be sure you are a joint owner. You don’t need one that is labeled “student checking”, but you should look for a basic account that will get them ATM withdrawals with little or no fees.
- Ask that your accounts be linked so that you can transfer money into their account should you need to, 24/7.
- Choose whether you want to be an overdraft source for their checking account. This option will ensure that they do not incur a fee if there are not enough funds to cover transactions, however some parents choose to make their children pay them a fee if this happens, forcing them to be aware of their balance and spending patterns. (You could also put it into an account for them and give it back to them later).
- Ensure they are set up for and can access online banking. This will allow them (via computer, tablet or smartphone) to check their own balances and validate their transactions on a regular basis. By banking through a mobile app, they can utilize mobile check deposit and deposit any paper checks they receive directly into their account from their dorm room. Through the app, they can also set up push notifications and be alerted if their account balance falls below a certain threshold. You can also view their account online – making it easy for you to get ahead of potential issues.
- Order a debit card. This is still the easiest way to access funds from their account. VISA is globally accepted so they never have to worry about being able to pay for something. They will need to monitor their transactions regularly and guard against fraud by keeping their card in a safe place and never giving their number to anyone. Rest assured that they aren’t liable for unauthorized purchases, as long as they were not negligent.
- Discuss what mobile applications they will use for peer to peer money transfer. Paypal and Venmo are popular these days but must tie to a checking account or credit card. Make these decisions up front and determine who will monitor these accounts.
- Agree upon a budget. This may be the first time they are truly away from home – make sure they know the difference between wants and needs, and how to track their spending and make good decisions so that they will not hurt their credit score for their future.
- Give them the gift of education that will last a life time. Visit our Students & Recent Grads page for more information including fun videos for students about important good money habits, building a good credit score and responsible spending.
This may be one of the last times they listen to you…make your advice count and pave the way for their future financial success.
Theresa B. Mann