A couple of weeks ago, I had the poignant experience of packing my 15-year-old son off for a month-long stay at a summer camp in the San Juan Islands, the first time in his life he’d be away from home for any period longer than a one-night sleepover at a friend’s house. Taking him to the airport and hugging him goodbye made me ruminate on how I’ll feel when I send him off to college in just a few years.

Setting aside some very mixed emotions about how quickly the years have passed and the inevitability of “empty-nesting,” I wondered about the things I could do to help make his first year on his own successful and our mutual transition as smooth as possible. Many of my colleagues at Schwab have college-age kids, so I thought I’d poll a few of them for their best tips on making the transition a successful one. After all, the new school year is almost here, and there are plenty of parents sending fledgling freshmen off for what will be their first time away from the nest. This is what I got:

“Make sure they have an alarm clock and know how to wake themselves up in the morning.” (This is something I definitely need to start working on now.)

“Make sure they know how to do their own laundry, including separating the whites from the darks.” (Another to-do in my household.)

“Make sure they know how to address an envelope!”

But on a more serious note, and because most kids aren’t well prepared for financial independence, there are some practical ways to give kids a leg up when they get their first taste of being out on their own.

Some of the lessons in “Money 101” are the same as when I and my Baby Boomer contemporaries headed off to college long ago:

• Set up a regular source of income (just like an allowance), so your teen can depend on a set amount coming in every month.
• Help your teen learn to write a budget, so that they understand what will be coming in vs. going out and can learn how to manage within those constraints. A handy budget planner is available on schwabmoneywise.com.
• Help them open an FDIC-insured checking account. One that I like, through Schwab Bank, is the Schwab Bank High Yield Investor Checking® account, a great choice for college kids. It has no monthly service fees, no minimums, it’s linked to a Schwab One brokerage account so they can begin to learn about investing too, and it offers unlimited ATM fee rebates worldwide (a real plus if your student does any traveling). They can additionally apply for mobile deposit and download the Schwab app for their iPhone® or Android™ to make checking balances, paying bills and making deposits a snap.*

That leads me to a second category of “Money 101.” A lot has changed since I went to college. I certainly didn’t have a mobile phone, much less one that would let me deposit checks just by taking a photo of them. In fact, very few people even had credit cards at the time, and debit cards and ATMs wouldn’t appear on the scene until years later.

Come to think of it, it was like the dark ages of money management!

These days, supermarket checkout clerks are often astonished when they see me noting the expense in my check register (am I a dying breed?). No question – a lot has changed in the past decades, and with that in mind here are a few more tips.

• Teach your teen the importance of keeping track of what they have. It’s not necessary to use a check register like I do, but your student will need to keep tabs on what’s in their checking account. The fact that they have multiple ways of accessing their money (ATM, check-writing, PayPal™, mobile) can potentially create some challenges, so if they don’t want to maintain a check register, they should at least look online at their checking account balance on a regular basis.
• Help them shop for and apply for a credit card if they don’t already have one. This is a perfect time to learn how to become a responsible credit card user, something that can be helpful for building a good credit score down the road. You’ll likely need to co-sign since there are restrictions on issuing a credit card to anyone under 21.
• Finally, be sure to set clear expectations. Whether your teen suffers from “affluenza” or not, make sure they know from the outset what they’ll be expected to pay for vs. what you will cover. And let them know that if they overspend and run out of cash, you won’t bail them out – unless it’s for a dire emergency.

But don’t just take my word for it. See what the experts say on SchwabMoneyWise.com.

 

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Schwab Bank High Yield Investor Checking accounts are available only as linked accounts with Schwab One® accounts. The Schwab One brokerage account has no minimum balance requirements, and there is no requirement to fund this account, when it is opened with a linked High Yield Investor Checking account.

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