5 Financial Steps to Take Before Graduating High School

Quick Answer

Here are five financial steps to take before graduating high school:

  1. Open a bank account
  2. Use a budgeting app
  3. Check your credit
  4. Start looking at credit cards
  5. Consider college savings accounts
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Graduating high school is a big milestone, and one that comes with new goals and exciting opportunities. Before you graduate, make sure to take important money steps such as opening a bank account, setting a budget, learning about credit and more. The following five financial steps can make a big difference when you're just starting out.

Remember, many financial accounts require you to be 18 when you open them. If your 18th birthday falls after graduation, you may have to wait to make some of these money moves.

1. Open a Bank Account

When you turn 18, you can open a bank account on your own. If you already had a bank account before age 18, your parents may have helped you open the account. But now you can pick your own bank and account terms if you choose to.

Why It's Important

It's a good idea to have both a savings and checking account as safe places for your money. If you get them from the same bank, it's convenient to transfer money back and forth online.

There are many types of banks to choose from. Some online banks offer perks like high interest rates and intuitive apps that may be a good fit for young adults. But there are benefits to in-person banks, like being able to go speak to someone at a branch when needed.

How to Do It

You can open a bank account online or in person at the branch. Follow these steps:

  1. To open a bank account you'll need information like:
    • Identifying information including your name, address, phone number and email
    • Social Security number or individual taxpayer identification number
    • Government ID like a driver's license or passport
    • Second form of ID like a bill with your name and address or your birth certificate
  2. Be prepared to make an initial deposit if the bank requires a minimum amount to open an account. Bring a check, money order or cash to do so.
  3. If you're taking control of an account your parents helped you open, make sure you have the username and password as well as the ATM/debit card and PIN in your possession.

2. Use a Budgeting App

A healthy budget is the No. 1 way to start yourself off on the right financial foot. When you use a budgeting app to keep track of the money you earn early on, it can set you up for success.

Why It's Important

Knowing where each dollar goes is the basis of financial health. Budgeting apps can help you plan for upcoming expenses and unexpected bills.

How to Do It

There are many different budgeting apps available. Some combine all of your financial accounts, like your savings account and credit card, into one platform for easier viewing. Others give you options to track your spending manually.

You can use the Personal Finances feature in an Experian CreditWorksSM account to track your income, spending and account activity across multiple accounts in real time. Easily set alerts for when accounts go over a certain spending level.

3. Check Your Credit

When you check your credit, you'll see your credit report (if you have one). Your credit report is a log of credit-related behaviors like payments on loans or credit cards. Your credit score is based on your credit report from one of the three national credit bureaus (Experian, TransUnion and Equifax).

You might not have a credit report yet if you don't have any credit accounts or your parents haven't added you as an authorized user on one of their credit card accounts. Not a problem: Once you turn 18, Experian Go™ can help you begin your credit history by creating a credit report for you. That's the first step to jump-starting your credit.

Why It's Important

A good credit score can take some time to build—and just a few bad choices to ruin. When you monitor your credit, you can catch any issues like a late or lost bill before it sets back your positive credit progress.

How to Do It

If you have a credit report, you can check it by:

  • Getting your free credit report from Experian. Not only can you get an updated Experian credit report every 30 days, but you can also use your account for free daily monitoring and get notified about changes to your report and score.
  • Getting a free credit report from all the credit reporting agencies, including TransUnion and Equifax, at AnnualCreditReport.com.

4. Start Looking at Credit Cards

If you feel that you can responsibly use a credit card, it may be time to start looking at your credit card options. But it's something you have to be sure you can handle. Getting a credit card before you're ready to keep your spending low and make every payment on time could do serious damage to your credit early on.

Why It's Important

If you can start building your credit by getting a credit card early, you'll benefit from a lengthy credit history. This can help when you need to access credit later for things like getting a car loan or renting an apartment.

How to Do It

As a young adult, you likely do not have much of a credit history, which means you may not be approved for many cards that require higher credit scores.

Also, many credit cards will require that you are 18 before you can apply in your own name. If you're under 21, they may require a cosigner to ensure you have enough income to make payments.

To try to get a credit card:

  1. Apply for secured cards, which are designed for people building their credit. While these require a deposit, they can be a great tool for getting your first approval.
  2. If you are headed off to college, consider applying for cards aimed at students.
  3. Talk to your parents about becoming an authorized user on one of their cards. This can give you access to a credit card even if you may not qualify for one on your own yet and will instantly give you a credit history, since the card will appear on your credit reports.

5. Consider College Savings and Expenses

If you're headed off to college, get familiar with the costs associated and any savings your family may have put aside for you. If you're applying for financial aid, you may want to ask for help. A parent or college financial aid officer can make sure you understand loans, grants, scholarships and any remaining financial responsibility you may have.

Why It's Important

Paying for college will likely be one of the biggest expenses in your life, and the cost can affect your finances for many years. Making sure you understand how much you can afford can help set you up for financial success.

How to Do It

Take stock of any college savings you may have. These totals may affect what you can afford outright or how much aid you'll be given. Find out if your family has saved for you in accounts such as:

Consider tuition costs in relation to these savings. Your parents may have the account logins and balance information for you to review.

Even if you don't have a large college savings fund, it's still possible to get scholarships and grants or get student loans to help pay for your education.

The Bottom Line

Taking responsibility for your finances is one of the first steps toward adult independence. You don't have to do it all at once, but when you start to take some of the steps listed above, you'll be primed to make more financial decisions for yourself.

Consider starting with Experian Go. This can give you access to free credit monitoring, personal finance management tools and identity theft monitoring, just to name a few. Getting started with Experian Go now can give you the tools to feel in control and confident with your finances right from the start.