You did it! You’ve successfully navigated 12 years of education. In a short time, you’ll receive the reward for all of your hard work: a high school diploma and a new level of adult independence. But with independence comes responsibility. At least, it should. Graduating from high school is a major accomplishment. No matter what your next phase of life may be, you should be financially prepared to take a mature approach to your income and spending to ensure a bright, successful future. Below is part one of our two-part series covering financial management tips for graduates! First on the list, tips for high school graduates to ponder before getting booted into the real world.
Create a budget
Good financial health begins and ends with a clear understanding of how much money you’re taking in versus how much you’re spending. It sounds simple, and can be, especially at this stage of life. To get started, spend one month tracking every penny made and every dime spent to gather a clear picture of your financial outlook. Thirty days should give you a good understanding of your financial situation and include regular monthly expenses that you can plan for, such as cell phone bills and car insurance.
Once you have a clear picture of your monthly income and expenses, you can begin budgeting for the year. Monthly budgets should not equate to net zero every month. Keep in mind, some months are better than others. Unexpected financial emergencies such as car repairs can happen at any time. Establish a budget that allows you to save as well as spend comfortably.
Benefits of a part-time job
A key component to that budget you just created is income. Securing a part-time job makes sense after high school—especially if you’re not able to get a full-time job right now due to time constraints like attending college or pursuing other interests such as traveling. Either way, a part-time job can provide a decent income with more flexibility. Another benefit is the experience you gain with part-time employment, which could lead to a full-time opportunity in the future.
Open a checking account
You’ll need somewhere to secure all that hard-earned money, and tucking cash under your mattress isn’t the best plan. Opening a checking account is easy and can typically be done online. Checking accounts vary among financial institutions, so be sure to look at the fine print or talk in detail with a representative. To start the conversation, ask about fees, online banking, debit cards, and minimum account requirements. New graduates should search out accounts with zero fees and low-or-no-minimum balance requirements. Member One offers its Campus Advantage Checking Account for young adults, and as a bonus, our credit union provides free professional advice on money management. Other financial institutions may have similar programs.