Prepare your teen for college living

Graduation may be approaching for your son or daughter, and he or she could be headed off in one of any number of directions. No matter what the destination, your teen needs to be prepared to manage the costs that are going to come.

A better understanding of the cost of living can motivate your teen to think more carefully about the future. Life after high school is a crucial time, when young adults explore different directions they can take for a career, and start amassing the education and training they need in order to set those careers in motion.

Knowing the costs they can expect when they live on their own can help them stay focused on their long -term career goals, and help them more effectively manage the costs they have during education and training.

One way to introduce the cost of living to your teen is to show him or her your family budget. Your teen will be able to see an overview of basic living expenses, and also see the planning and management that have gone into your household budget. You also can walk your son or daughter through major financial decisions your family has made, and discuss what you did to overcome any financial difficulties.

Costs change with inflation and other factors, and your teen’s immediate budget in the years after high school won’t be the same as a family budget. But your son or daughter will at least have a rough idea of future costs, and have an example to follow in managing those costs.

Here are a few examples you can start with:

Bill payment list or monthly budget.

Your monthly budget should include all of your expected bills for the month, as well as the total amounts that you spend on categories like groceries, dining out, entertainment, household, etc. It also should include your long-term savings goals, subtracted from your account in monthly or bi-weekly increments.

In lieu of a budget, your bill payment list can give your son or daughter a quick snapshot of your family’s housing costs, utilities, auto loan costs, and other long-term obligations they can expect in the future.

Family goals. If you have a list of goals that are outlined and prioritized, you also can show this to your teen. It can be heartening to see the progress that your family has made, and it also can give your teen an example to use in creating and managing a personal list of long-term goals. This goal list will provide a larger overview, covering a longer period of time than your monthly budget.

Budget tracking. You already may have introduced your teen to a simple version of your budget tracking system, but now is the time to go into detail about your methods. This is especially important if your teen will be living independently from you immediately after high school. Financial software can simplify the process of adding, tracking and categorizing expenses in a centralized place, so it can be worth looking into for you and your teen.

After you’ve reviewed the family expenses with your teen, you can help your teen build a personal budget as he or she starts a new life.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 19 years experience in retail banking and with financial institutions in Guam and Hawaii.  You can email him at


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