Talking Money with Your Graduate Can Lead to Real Empowerment

Help your graduate learn four personal financial skills essential for success

A young man using his laptop

As your graduate transitions to his or her new life, it’s the perfect occasion to share information that stands the test of time — financial basics. An open conversation about money management can help your graduate navigate life with more confidence.

Consider these four essential personal financial topics to get started.

  1. How to budget
    Budgeting may seem overwhelming at first, but it’s a critical part of your graduate’s financial success — whether he or she enrolls in college, joins the military, or enters the workforce after graduation. Here are key points to cover with your graduate:

    • Explain the difference between income and expenses — and how expenses should never exceed income.
    • Review the different categories in a typical budget and how he or she can customize it for maximum success.
    • Discuss the different tools available to help your graduate create a budget, such as Wells Fargo’s Budget Watch. Then, develop a budget together and answer any questions he or she may have.
    • Describe how you examine your budget at the end of each month and the steps you take to adjust it when necessary.
  2. How to save
    Most graduates heading to college or starting a new job don’t think it’s essential to save money this early in life — but, of course, it is. Teach your graduate the following:

    • How to set up a savings plan, what to look for in a savings account, and how interest works. An easy way to get your graduate started is to check out My Savings Plan®.
    • Ways to save, such as automatically transferring money from your paycheck each month to your savings account.
    • The value of saving even a small amount regularly. These funds can come in handy — especially in the event of a financial emergency.
    • The power of compound growth. Explain that by starting early, your graduate will have more financial flexibility in the future.
  3. How checking accounts work
    A checking account will help your graduate manage everyday expenses. If you haven’t already, review the checking options available at Wells Fargo with your graduate and discuss the following:

    • Checking account fees and how to avoid paying them.
    • Different ways to access a checking account — online banking, mobile banking, checks, ATMs, and debit cards.
    • The importance of keeping personal financial information secure. Encourage your graduate to never share his or her account number, debit card, or other financial information. Also, explain what to do in the case of a lost or stolen card, or if he or she is a victim of identity theft. Learn how to report a lost or stolen Wells Fargo debit or credit card.
    • The value of consistently monitoring checking account transactions to gain insight into daily spending and to help protect against fraud. Share how you review checking transactions daily, whether using online banking, your mobile app, or other online tools, such as Wells Fargo’s My Spending Report. Encourage your graduate to report any issues to his or her bank; for instance, an unauthorized transaction or inaccurate month-end balance (when compared to the monthly checking statement). Learn how to report unauthorized transactions or any other inaccuracy in a Wells Fargo checking account.
  4. How to use credit wisely
    Your graduate may not be eligible to get a credit card or other loan unless you cosign on the loan. Before you cosign, however, ensure he or she understands the importance of using credit wisely by discussing:
    • How credit works, what an interest rate is, and why one should avoid paying interest if possible. You may want to use one of your credit cards as an example — review the terms and conditions of your credit card, and explain why you chose it.
    • What a credit score is and how it’s calculated. Explain that missing payments or having a considerable amount of debt may negatively impact your graduate’s credit score.
    • Credit mistakes you may have made as a way to help show your graduate what to avoid in the future.
  5. Get helpful information about how credit scores are calculated and tips for using credit wisely.

As a parent, your most important priority is your children. Send them off into the world with a clear understanding of these financial basics to help them be confident in their ability to handle day-to-day financial matters.