What to know as a parent of a senior in high school
It is a parent's job to teach their kid the skills they will need to succeed in life before leaving for college. One of the most important skills you can teach your high school senior is the ability to properly handle and manage their money.
Limit Their Allowance
You may be tempted to give your kid money every time they need to buy something, but this can potentially create a huge problem in the future. It is very important that your kid knows the value of money before they leave for college. Giving them money every time they ask will just create reckless spending habits. This is the perfect time to start limiting their allowance. It is also a good idea to only give them money after they have helped around the house or performed another good deed. This will teach them that you will not always be there to bail them out of their money troubles.
Encourage Them to Get a Job
Another great way to teach a young adult the value of money before graduating high school is by having them get a part-time job. Once they start to earn their own money, they will realize the true value of money. They will not be willing to spend hundreds of dollars on an extravagant item after knowing they will have to use their whole paycheck to buy it. While getting a job is great, their schoolwork still needs to be their primary focus.
Teach Them About Bills
Your kid is only a few years away from living completely on their own, so it is time to start teaching them everything there is to know about paying bills. Show them how the entire process works by having them watch you pay a few household bills. This is also a great time to have your son or daughter pay for a few of their own expenses. Since not too many high school seniors have their own monthly bills, the easiest way to do this is by having them pay all their car expenses. Make them fully responsible for the gas, oil changes and car washes.
Help Make a Budget
Once your son or daughter has a steady flow of income, it is time to help them create a simple budget. This will allow them to see exactly where all of their money is going every month. Stress the importance of saving throughout the budget making process. Having extra money left over at the end of the month should not be an excuse to make a frivolous purchase. College is meant to be the best time in a young adult's life, so make sure they have some money set aside to have a little fun too.
Teach the Pros and Cons of Loans
Any young adult should know the basics of finances – how to save, spend, and borrow responsibly. It is likely that your child will eventually encounter an unexpected emergency that requires immediate financial attention, whether it be a trip to the hospital or an emergency car repair. It may be challenging for a college student to be truly prepared for these financial emergencies, or to have enough savings on hand to cover this type of unexpected expense, so make sure they know the pros and cons of loans. Teaching your child the different user cases for financing options like credit cards, installment loans online, or borrowing from a family or friend should they ever face an unexpected emergency. Be sure to stress the importance of creating a game plan to pay back these loans as quickly as possible to develop responsible borrowing habits.
It is impossible to fully prepare your kid for their upcoming life in college, but you can make sure they do not make any major financial mistakes. Passing on good money tips is crucial if you want your son or daughter to have a successful future.
