The 5 Conversations You Need to Have with Your Graduate

Posted on: in [ Personal Finances ]

Your high school senior has had to deal with a lot in their four years of high school: day in and day out of classes, late nights spent studying and excruciating tests of their knowledge. But it is May and graduation is right around the corner, if it hasn’t happened already, and they can see the light at the end of the tunnel.


However, a high school diploma, cap and gown does not make them a genius. While we have no doubt your child is intelligent and confident in getting ready to take on college, there may be a few lessons they still have to learn. State Bank has put together this short list of money conversations we recommend having before they head off to college in the fall. It may seem a long time away, but it will be here sooner than you know!


There are no free handouts- by now your child has figured out that money comes as payment from work that is done. However, loans and credit cards are a tempting option because it doesn’t feel like you’re spending money when you use them. Talk with your graduate about the importance of having a job and using that money for living, and that credit cards and loans are for special circumstances only.


If want things for yourself, you need to budget- “winging it” when it comes to your kid’s finances won’t cut it anymore. It may have been fine in high school when they had few expenses to worry about. They need to understand that new clothes, the latest smart phone and other items require budgeting and saving. Talk with them about the difference between “wants” and “needs” to help them prioritize what they must spend money on.


Financial Success Starts with Smart Management- as they get older, your child’s financial needs will diversify, meaning they need to be able to manage different tools. Be sure they know the ins and outs of their State Bank checking and savings accounts, as well as how to use their online or mobile banking account to their advantage. If you think it is appropriate, you can co-sign for a credit card with them, but ensure they know the rules for use and the penalties for not making payments on time.


They aren’t tax-exempt- sure, they may not have a huge income, but they will most likely still owe taxes. If you haven’t included them in preparing their tax returns already, make sure they know why they have to pay taxes and when they will need to go through the tax preparation process.


Giving back is just as important as saving for yourself- some parents require their kids to give a small portion of their income back, whether it’s to the church, a charity or other non-profit organization. Instilling this sense of financial responsibility before they head off to college can help your kid continue giving back throughout their life.


While there is not a written final exam for these lessons, the test will come in real life. We know you’ll be there to help your child when they just don’t get it, and you have our promise that we’ll be here too. If there’s anything we can do to help, just come by any of State Bank’s offices today!


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