5 Financial Fitness Tips for High School Graduates

So you have a son or daughter that graduated high school this year. Now what?

When it comes to money, now is when things really count. Your high school grad can grow up to be very good with money, and live a great life. Or they can get stuck in the rut of personal finance problems that stays with them for life.

With only 17 states across the country requiring high school students to take financial literacy courses, getting financially fit could be an uphill battle for any recent grad.

I know you care deeply about your child, and the happy life and success they can attain. I’m sure you’d hate to see them coming to you for cash at every turn, just because they never learned how to manage money.

I want to help you fix this today, so your grad lives the great life we just pictured, instead of the life of difficult and despair.

Here are 5 tips to help your high school graduates navigate the financial world:

Financial Step #1: Teach them to live within their means.

Tell them why they need to spend less than they make each month. Monitor their spending, and make sure they understand exactly what this important step means to their future. Explain to them what could happen in either scenario, the good and the bad.

Financial Step #2: Avoid debt as much as possible.

I understand that debt is necessary for certain things like buying a home or even for a college education. But you have to encourage them to use the money they need and that’s it. Not a dime more. Explain to them what happens when they are irresponsible with credit and debt.

Financial Step #3: Use the power of compounding interest to make them rich.

Set up a Roth IRA in their name and have them invest a little bit of money each month in a low cost index fund. Maybe even let them know that you will match every deposit they make so they have extra incentive. Starting them off on the right foot early in life, and making saving and investing automatic, will pay off for them big time.

Financial Step #4: Have them mind their credit.

At this age they might not have a credit score yet, but now is the time to have them work on it. Make sure they know a great target to shoot for with their credit score is 750 or higher. Teach them how to be responsible with credit. And be sure they know exactly what can happen to them if the don’t follow your advice.

Financial Step #5: Have them fun with their finances.

Seeing money build in their accounts will be fun to them. Encourage them to enjoy saving, investing and spending wisely. When they get off track, which will happen, don’t let money stress them out and affect your relationship. Let them know it’s just money. And there’s more where that came from if they stay on the right path.

You taking the time to guide your new high school grad in the right direction could mean the difference between them respecting money and credit, and enjoying watching their wealth grow…

Or them being irresponsible with money and credit, bringing stress into your family, and of course hitting you up for cash every time you turn around.

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