The cap has been tossed, the diploma framed, and now your high school graduate is officially a legal adult. Whether they’re college-bound, heading into the workforce, or taking a gap year to figure things out, turning 18 is more than just a milestone—it’s a financial and legal line in the sand.
Ways You Can Help Your Recent Grad
Banking
The key is to start simple. First, they’ll need a checking and savings account if they don’t already have one—preferably one without monthly fees or minimums. If they’re earning income, whether from a summer job or full-time gig, setting up direct deposit and learning to manage cash flow is step one. Encourage them to treat their savings account like a “no-touch” fund, even if they’re only putting away $10 at a time. Getting used to the habit is the real win.
Budget
Next, it’s time to talk budget. Understanding where their money goes each month can make the difference between feeling in control and calling home for help before the next payday. A simple method like the 50/30/20 rule:
- 50% for needs (rent, groceries, bills)
- 30% for wants (yes, that Netflix subscription counts)
- 20% for saving or debt repayment
Apps like Mint, Rocket Money, or YNAB can make the process less painful and maybe even… fun?
Credit
This is also the time when you need to start talking about credit. Now, getting a credit card isn’t as easy as it used to be; even your bank might not take on a first-time credit card holder with a relatively low-paying job.
Consider a secured credit card
If your child is just starting out and doesn’t qualify for a traditional card, a secured credit card is a great first step. You (or they) provide a refundable deposit—say $200 or $500—which becomes their credit limit. It’s a low-risk way to help them build credit while keeping spending under control.
Look into student or starter cards
Many banks and credit card companies offer credit cards specifically designed for college students or first-time users. These usually have lower limits and fewer perks, but they’re perfect for getting a credit history started. Just be sure to review the terms together, including interest rates and fees.
Add them as an authorized user on your card
If you’ve got good credit habits, consider adding your child as an authorized user on your card. This lets them piggyback on your credit history, which can help build their score. Just make sure they understand it’s a serious responsibility, not a free pass to shop.
This is the time to explain what a credit score is, how interest works, and why paying at least the minimum on time, every time, is non-negotiable.
Investing
Even if retirement feels like a galaxy far, far away, it’s never too early to think about investing. If your grad has a part-time or full-time job with earned income, a Roth IRA can be a powerful tool. Just imagine the magic of compound growth working in their favor for the next 40 years. That’s the kind of financial glow-up most people only wish they had started in their teens.
Your To-Do List
Once your child turns 18, you officially lose access to a lot of things you previously managed, even if you’re still paying their phone bill and washing their laundry. Here’s what needs to be in place:
- Healthcare Power of Attorney
If your child is in an accident and unable to make medical decisions, you won’t automatically have the right to make them either. A healthcare POA lets you step in when needed. - HIPAA Authorization
This allows medical providers to share information with you. Without it, even a college clinic might refuse to talk to you about your child’s health. - Durable Power of Attorney (POA)
This gives you legal authority to handle financial matters if your child can’t. Think of things like signing documents, dealing with banks, or even sorting out a financial aid issue. - FERPA Waiver (If They’re in College)
FERPA restricts access to a student’s academic records, even for parents footing the bill. A waiver allows you to speak to school officials and access grades.
Pro tip: Keep these documents somewhere safe and easily accessible, and give copies to relevant institutions if needed (like the college health clinic or university registrar).
Whether your graduate is moving into a dorm, commuting to work, or backpacking through Europe with a part-time job funding their dreams, there’s plenty to think about: insurance coverage, taxes on their first paycheck, setting short-term financial goals, and learning to live within their means. Adulting isn’t about perfection—it’s about taking small steps in the right direction.
So yes, they might still come home with laundry or ask you how to cook pasta, but financially? They’re ready to take those first independent steps. And you? You’ve officially graduated from daily lunch-packer to financial mentor. Not a bad promotion.
Are your finances going to change with this milestone? CLICK HERE to make an appointment with a financial planner in the Birmingham, AL area.