Get Your High School Senior Ready for Financial Independence with These Tips

A mother and daughter hug.
Getty Images

You’ve tried to teach financial independence to your kid, but how prepared are they really?

Only 22.7% of U.S. high school students had guaranteed access to financial literacy education, according to a 2021-22 report from Next Gen Finance. For students leaving high school for immediate employment, paying bills and building credit are essential skills.

College-bound teens also will face some serious financial decisions once they arrive on campus. Many students graduate with credit card debt. Even those who avoid it need to learn to budget, buy food and set money aside for a rainy day.

What can you, as a parent or guardian, do to teach financial independence as graduation approaches? We have some tips for teaching your teen how to manage money.

Why is it Important to Teach Financial Independence?

College is more expensive than ever, but tuition isn’t the only concern for students entering college. One survey found that 73% of students faced financial problems, and 1 in 5 students said they’d run out of money eight or more times in the previous year.

Even students with plenty of money in the bank struggle to adjust. For college students moving off campus, many will learn adult money lessons for the first time. That includes learning how to grocery shop, and pay rent and utilities while also setting money aside for emergencies.

As a parent, though, you’ve probably been teaching your kids about finances for years. You might not even realize your children have observed your own habits.

“The more transparent parents are with their money, the easier it will be for the children to understand the concepts of investing and money management concepts,” said Robert Farrington, founder and CEO at The College Investor. “Most children learn through observation, so seeing how parents handle money and invest goes a long way.”

As your child enters high school, though, the clock starts ticking. By senior year, it’s time to sit down and talk through some teenage money management tips.

5 Lessons that Teach Financial Independence

Teaching teenagers about money can feel overwhelming, but don’t feel the need to cover it all in one day. It can also help to have a list so you don’t forget anything. Xiomara DeLeon, assistant vice president/branch manager at Addition Financial Credit Union, suggests a few topics you won’t want to miss in your discussion.

1. Start with the Basics

One of the best ways to teach financial independence is to start small.

“Banking, budgeting and the importance of credit scores are crucial lessons for any student entering college,” DeLeon said. “These are topics often taught at school and are skills they will use for the rest of their future.”

But whether they’re taught these lessons in school or not, DeLeon recommends starting with the basics. Review the various types of financial products and explain their practical applications. Those include checking and savings accounts, debt and credit cards, and interest rates. A demonstration of how interest on a specific dollar amount can add up over time can make a lasting impression.

2. Establish a Bank Account

Setting up a bank account can feel intimidating for a teen. As DeLeon points out, young adults might not know which products to choose or what questions to ask. One thing parents can do is encourage teens to research before visiting the bank. DeLeon recommends helping them comparison shop while paying particular attention to fees, approval requirements, and the pros and cons of each lender.

Once your teen has set up an account, walk them through the basics of online banking. Show your teen how to look up account balances, transfer funds between accounts and use online bill-paying services.

3. Build Their Credit

Your teen money lessons should include finding ways to build credit. While your high school senior might not be ready to make major purchases yet, when the time comes, a good credit score will come in handy. DeLeon recommends starting with a teenage money management lesson on credit.

“Explain to your student that credit can be described as money you are given to use now, but it must be paid back,” DeLeon said. “Credit is considered your financial reputation as a borrower.”

According to DeLeon, here are a few ways a high school student can start building credit:

  • Add your student as an authorized user on your credit card. This allows them to start building credit without taking out a separate credit card.
  • Consider a student credit card. Student credit cards have low barriers to entry and are designed for building credit.
  • Emphasize responsible credit use. Teaching teens about budgeting can help, but stress the importance of paying bills on time and only charging what can be easily paid off.
  • Teach credit score monitoring. As your student starts to build credit, keeping an eye on things is important. Walk your teen through credit score monitoring using the bank’s built-in credit monitoring feature or a separate app.

4. Offer Hands-On Experience

As useful as tutoring your high school senior can be, the best teen money lessons come from real life. Step back and let your teen get started with banking and budgeting. If you’ve lined up a student credit card, have them make a few small purchases each month and pay them off.

In the early days, you’ll want to keep an eye on what they’re doing and answer questions.

5. Encourage Continuing Education

Financial independence will be important long after they graduate college. An essential part of teaching young adults about money is encouraging them to learn on their own. This will ensure your teen continues to seek out the latest financial advice well into the future.

“Encourage your high schooler to continue learning about personal finances through books, online resources and courses,” DeLeon said.

Teaching financial independence through lessons in budgeting, saving and building credit is an important part of preparing teens for adulthood. Make a list of the topics you want to cover, gather your resources and schedule a time to sit down together. Once you’ve opened the lines of communication on the topic, your child will know to come to you with any money questions.

Stephanie Faris is a professional finance writer with more than a decade of experience. Her work has been featured on a variety of top finance sites, including Money Under 30, GoBankingRates, Retirable, Sapling and Sifter.