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The time you have been preparing for the past 18 or 19 years is finally here. Your teenager has graduated high school and is either off to college, the military or getting a job and setting up there first household on their own. Next, ask this question: Do they know how to handle and manage their money and avoid the mistakes many of us have made? I do not know about you but I have made plenty and they cost me a lot of money.

Here are 3 things to go over with your young adult to prepare them to be on their own:

1.Keep a check book register.

It doesn’t matter how or where they do it, but they must do it. Keep a checkbook register of every transaction as well as a current balance. This does not mean checking your balance online. An online total is not your balance. Why? Because more than likely you have outstanding checks or debits that will affect your actual available balance. Relying on your online balance will almost inevitable lead to overdraft fees. I recently read a post from a friend (obviously not using a register) who had a check clear the bank that was written 3 months ago. It also brought with it an overdraft fee. If you use a register and the amount of the check is removed from your balance it is accounted for, regardless of how long it takes to clear.

2.Have a written Monthly Spending plan.

Sit down with your son or daughter and walk through what their income is, what money they have to spend for the next month and what their expenses are. This needs to be written either on a sheet of paper or on the computer so they know what they have to spend and where they are going to spend it. The key to making this work is to spend less than they are making. If they have an income problem (as in not enough income) they need to do one of two things: find a new job that pays more or find a second job to cover the short fall.

3.Make a commitment to live debt free.

This is something we not only need to help our kids to understand, but we need to understand and commit to it as well. It is time to stand up and make a choice the right choice even if it is not what everyone else is doing. We need to educate our kids to understand you can go to college, buy a car, take vacations and, in general, do the things you want to do without going into debt. Is it harder? Maybe a little. Will it take longer? Possibly. Will it be more rewarding? Definitely! The hardest part of living debt free is that it goes against everything that society is telling you to do. You and your children can live a life without going into debt. Teach them this at an age, as they are just beginning down the road to adulthood, and they will be much better off. Ultimately, they will be very thankful when they realize how much money they did not give away to banks and credit card companies so they could have instant gratification.

It is very important that we get this into our kids before they leave our homes. If they have already left, it’s not too late. If you need help in talking and educating your teen about personal finance give me a call 317.858.7270 or email me We have several options to help you and your teen.

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