5 Money Moves for Graduating High School Seniors

I remember the rush and excitement of my high school graduation. There were parties, galas, and proms.

My family was so proud of me. I had finished all of my exams and was accepted to college with a scholarship.

However, I had no idea what awaited me in college (spoiler alert it was awesome). Fast forward six years, and I am looking back on what helped and hindered me financially.

Big disclaimer here – everyone is different and what worked for me may not work for you.

Overall I think these tips apply to the majority of graduating seniors whether you go straight to college, the workforce, military, or trade school. 

Here are five of my recommendations to graduating seniors:

1. Treat yourself! (within reason)

Congrats!

You just completed high school, and you should celebrate.

Now is a great time to get something that you’ve had your eye on, or something sentimental to remember your achievement.

For example, I love hiking, camping, and being outside.

The way I treated myself was to buy a nice Arc’teryx jacket with the money I had saved from lifeguarding part-time and some graduation money that was gifted to me.

You don’t need to spend everything you have earned or been gifted, but post-high-school life is filled with a new set of responsibilities so a nice gift to yourself is a well-deserved treat.

2. Open your own bank account

I am going to assume that you have some kind of bank account or credit card linked to your parents’ or other family member’s accounts.

I am also going to assume that you will continue to have access to this account for the foreseeable future for allowance, tuition, or emergencies.

Now that you are graduating you are taking the first step to adulthood, and as a developing adult you should have your independent bank account.

I worked part-time throughout college, and I always had my paychecks deposited into my bank account.

Why?

Because it symbolized to me that I am making my path.

Yes, I still had a separate linked account with my parents, but they didn’t need to know how often I ended up at cookout at 2 am (weekly at a minimum). 

I would recommend Chase Bank because they have branches and ATMs, and they also have great credit cards and investment products that you use as you get older.

3. Invest a little (or a lot)

As you transition out of high school, you’ll begin to hear a lot about the stock market, interest rates, and lots of other finance terms.

The easiest way to learn about these things is to get involved.

I was very fortunate and had a mentor who taught me how important this was as I was getting ready for college, and I cannot thank him enough for teaching me about investing. 

Realistically you only need $100 to become an active market participant.

You can do it with less, but you really won’t be able to see how the market affects your portfolio (a group of investments you have). Whether it’s $10 or $10,000 open a brokerage account (after doing your research and with your parents’ help) on Vanguard or TD Ameritrade.

Then, buy some shares in a Mutual Fund (basket of a lot of stocks) or an ETF (essentially tradable pieces of a mutual fund).

Make sure that what you buy has exposure to many stocks in companies that you know e.g. Nike, GM, Apple, etc.

As your portfolio fluctuates and grows over time, you’ll have a direct attachment to most financial news which will make you a very educated young adult.

I double-majored in Finance and Accounting so I was always studying these topics, but my friends who had other majors but were still investing always had a general idea of what the different markets were doing.

4. Begin to Build Credit

This has been a divisive topic among young people for years, but I firmly believe that if you have medium to great self-control, then you should get a credit card. The three main reasons are that if you use a credit card wisely then you will: 

1. have a decent credit history when you need to make a large purchase
2. credit cards offer more financial and identity protection than debit cards 
3. having a reputable rewards card can help you achieve financial goals faster than a debit card or cash.

At some point you are going to get an apartment, buy a car, or a house.

If you have a credit history you will be ahead of most of your peers, and it will be easier to be approved for a house or apartment if you want to move off-campus or out on your own.

If someone steals your debit card before you have a chance to deactivate it then they have access to all of the money in your checking account.

If they steal your credit card then they are stealing a bank’s money. Banks have way more resources than you do to pursue fraudsters and thieves – for this reason I almost exclusively use my credit cards for purchases.

Reputable credit cards usually offer a limited amount of identity protection that adds another layer of security versus a debit card.

Finally, my favorite use for credit card rewards.

Since I began building credit when I was 18, I was able to get a travel credit card by my junior year of college.

Thanks to the rewards on this credit card I was able to get a round-trip ticket to Australia for only $200.

If you want to try getting a card use a site like Nerd Wallet to learn more about them and what the best options for people looking to build credit. 

5. Wait to buy textbooks 

If you decide to go to school, then just wait to buy your textbooks until you are in your classes.

Professors typically say that you should have all of your textbooks before class starts, but they honestly may not always be necessary.

I probably spent almost $1,000 more than I needed to on textbooks.

Once classes start you’ll see what is required. If you can, rent them or buy them used since they depreciate so quickly.

If you buy them new you can usually make about 50% back by selling them to someone else that is going to take that class.