Top 3 Financial Things High School Grads Need to Do

1. Open a checking account

Don’t have a checking account already? Now is the time to open one. If you're under 18, you will need to have your parent/guardian on the account as a joint account holder.

Why…

  • If you work during your college years, you will need a checking account in order to have your paycheck direct deposited into your account.
  • A debit card provides a safe way to pay for things without carrying cash.
  • Having a checking account allows your parent/guardian to deposit money for you to purchase books or pay school fees with your debit card.
  • Mobile banking apps let you keep track of your balance, transfer funds, track spending and pay bills, all from your phone.

How…

Visit your local credit union’s website and look at their checking accounts. Look for a free checking account that does not require a minimum balance. Or, find a reward account like CCF’s Rewards Checking that rewards you monthly for everyday spending.

 

2. Establish credit

Establishing credit isn’t about needlessly spending money or going into debt, it’s about getting on the FICO scoreboard.

Why…

  • The “length of credit history” factor is 15% of your calculated FICO score.
  • Establishing a credit account for something you already buy, like gas for your car, allows you to build credit without the temptation to run up a huge balance on a credit card.
  • The longer credit history you have, the better for you when you need to buy/lease a car, rent an apartment or apply for additional school loans.

How…

Talk to your credit union about opening a credit card with a small credit line (max $1,000). You can use this card for a few small purchases per month (like gas) and pay it off in full each month.

Set a reminder in your phone to check the card balance at the end of each week. Don’t allow friends to use the card. This is not free money; this is a bill that will arrive at the end of the month that you need to pay in full. The “on-time payment” factor is 35% of your FICO score, so paying on time is very important.


3. Make a plan to manage student loan debt

Four years seems like a long time, but college will be over before you know it. Don’t let student loan debt dictate your life after school.
 

Why…

  • Compounding interest stacks up every month on unsubsidized federal loans, which, if left unchecked, can majorly increase your final balance once you graduate.
  • Private student loans accrue interest every month right after you sign for them, so just paying the interest on these loans will keep the principal from growing.
  • Determine which loans are subsidized (no interest until 6 months after graduation) or unsubsidized (interests starts to accrue immediately after the loan is issued).

How…

Have an open conversation with your parent/guardian about who is responsible for which loans and payments and calculate how much total debt will be accrued by the end of your education. If you are working during school, calculate your income and figure out what that income will be used for.

Apply for scholarships to offset tuition costs and lower loan amounts. 

 

Apply for cornerstone scholarships