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Financial Literacy for College-Bound Teens

A prospective college student is sitting outside with a laptop open in front of her with her mother looking over her shoulder.

As parents, we want to set our children up for success in all areas of life, and one crucial aspect is financial literacy. As teenagers prepare to embark on college, they will face numerous decisions that can significantly impact their economic well-being.

For young adults, navigating the financial challenges of college life isn’t easy. Equipping your kids with the necessary knowledge and skills can empower them to tackle those challenges head-on. 

Help them start off with the right financial products

Out on their own, young adults need the right tools to help them live their day-to-day lives.

Checking account

Checking accounts are like a hub for managing day-to-day expenses and learning responsible money management, but all accounts are different. Research different options together, considering fees, online banking features and accessibility to find the right account. And don’t forget to set up features like overdraft protection to help safeguard against unforeseen events.


Savings account

Setting up a savings account is a great opportunity to impart the importance of building an emergency fund. If your child has regular income from a part-time job, this is also a prime time to take advantage of automatic transfers into their savings account to help build a habit of regularly saving money.


College spending accounts

Soe universities offer spending accounts or prepaid cards for students to manage their expenses on campus. It's crucial to have an open conversation about these options. Consider the restrictions associated with these cards. While they’re usually linked to meal plans, they can also work as a debit card at approved nearby businesses. But the radius may be smaller than anticipated and impractical depending on where your child plans to live.


Transfer services

If you plan to help your child financially while they’re in college, things will go smoother if you set up a reliable way to transfer funds. While many financial institutions offer wire transfer services for a fee, you could also consider a joint checking account. With a joint account, transfers are usually free and you’ll be able to provide some parental oversight to help keep things on track. 

Another option: Use a transfer service like Zelle. With Zelle, you can send your kids money directly to their checking account in minutes, free of charge. Many banks—like First Tech—already have this feature baked into your online banking.


Build a budget

Creating a budget is critical to making informed spending decisions, but most high school students aren’t taught how to budget in school. This is a great opportunity for parents to sit down with their kids and share some money wisdom.

Discuss these steps:

  1. Assess your income: Start by determining their income sources. Calculate monthly or semesterly income, considering any variations or fluctuations.
  2. Track your expenses: Keep track of their expenses for a month to understand where your money is going. Categorize expenses into different areas such as rent, utilities, groceries, transportation and entertainment.
  3. Prioritize essential expenses: Identify their essential expenses, such as rent, utilities, groceries and transportation.
  4. Set financial goals: Help them determine short-term and long-term financial goals. Having clear goals will help them stay motivated.
  5. Reduce unnecessary expenses: Identify areas to cut back on expenses. Evaluate discretionary spending, such as eating out, entertainment or shopping.
  6. Be realistic and flexible: Help them set realistic expectations. Encourage them to be honest about their spending habits and avoid setting overly strict limitations.

Remember, building a budget is a learning process, and it may take some time to find the right balance.


Start on the path to good credit

Having a credit card is a pivotal step towards building a strong financial foundation, but young adults under 21-years-old may struggle to qualify for a card on their own.

But parents can help set their kids up for credit success:


  1. Credit Education. Help them understand how credit scores work, the significance of having a good credit history and how it can impact their future financial opportunities.
  2. Add them as an authorized user. Consider adding your teenager as an authorized user on one of your credit cards. This allows them to benefit from the positive credit history associated with the account. Ensure that the credit card issuer reports authorized user activity to credit bureaus.
  3. Explore secured credit cards. Secured credit cards are an excellent option for teenagers who are ready for their own credit card but don't yet qualify for an unsecured card. These cards require a cash deposit as collateral, which becomes their credit limit. By using the secured card responsibly and making timely payments, they can begin establishing their credit history.
  4. Emphasize responsible credit card usage. If your teen is ready for a regular credit card, help them understand the responsibilities that come with it. Teach them about the importance of paying bills on time, keeping credit utilization low and avoiding unnecessary debt. Reinforce the idea that credit cards should be used as a tool for building credit and not as a means for excessive spending. Try to have them think of it like cash in that everything charged should be paid for in full at the end of the statement period.


Create a plan for sharing expenses

College life often comes with hefty living expenses. Before heading out into the world, teens should work with their parents to come up with a fair division of costs that will work for everyone, while helping them develop a sense of financial independence.

Discuss the cost of housing, utilities, groceries and other expenses. Make a plan for how those expenses will be paid. Even if you plan to cover most of your child’s expenses in the first few years, keeping them in the loop will help them learn financial responsibility over time.


Help create success in the workplace

College students have a range of job opportunities available to them, both on and off-campus. When considering a job, there are several factors that students should take into account to ensure it aligns with their goals, schedule and overall well-being.

Before taking on any job, college students should carefully consider their priorities, including academic workload, extracurricular activities and personal well-being. It's crucial to find a balance that allows for academic success while gaining valuable experiences and financial stability.


Teach good financial communication

Effective financial communication is often challenging for adults, let alone teenagers. But young adults can only benefit and learn from discussing money with their parents. Try these steps:


Start early and lead by example

Encourage open and regular conversations about money. Be transparent about financial decisions, budgeting and saving. By demonstrating healthy financial habits, you set a positive example and create an environment that fosters open communication.


Foster a positive mindset

Emphasize the idea that there are opportunities for financial growth, multiple avenues to achieve goals and the ability to create more resources through wise financial choices. Encourage your college student to see money as a tool for personal and financial growth, rather than something to hoard or fear.



Create a safe space for your student to discuss their financial concerns and aspirations. Encourage them to share their financial goals, challenges and questions. Listen actively, without interrupting or criticizing, and provide guidance and support when needed.


Teach effective decision-making

Help your college student develop critical thinking skills when it comes to financial decisions. Encourage them to consider the short-term and long-term consequences of their choices, evaluate different options and weigh the pros and cons. Teach them to make informed decisions based on their values, priorities and financial goals.


Discuss financial values and goals

Discuss the importance of aligning their financial choices with their values, such as saving for a specific purpose, supporting causes they care about or achieving financial independence. When they have a clear understanding of their values and goals, they can communicate their financial priorities effectively.


Set up regular check-ins

Schedule regular check-ins to discuss their financial progress, challenges and adjustments. Use these conversations as opportunities to provide guidance, address any concerns and celebrate their successes. Regular check-ins also foster accountability and reinforce the importance of ongoing financial communication.

Here at First Tech, we’re here to help you set up your kids for financial success. Schedule an appointment with us anytime to discuss personal finances for your whole family.