The time has come: your child is no longer a child but a fledgling young adult ready to move out and begin a whole new life. For some, this happens in their early 20s, after college. For others, it’s earlier—or later. In any case, the transition is important, and can be exciting and bittersweet for the whole family.

Learning to be independent is one of the most important skills you can help your children develop. Use this checklist to make leaving home a little easier for everyone:

• Make a budget. This is crucial to smart financial management and starting out on one’s own. A budget should cover essentials like rent, loans, groceries, utilities, insurance, car costs, clothing, entertainment and travel. And of course, don’t forget savings! Our simple budgeting tool makes this easy to do.
• Set up an emergency fund. You never know what might happen, so emphasize the importance of saving and setting aside enough cash to cover three months’ rent and basic living expenses. It’s an important cushion to have—just in case.
• Pay off debt. Pay student loans and credit card balances on time. Being prompt with loan payments not only helps one's credit rating, but also imposes financial discipline. When it comes to a credit card, paying the balance in full every month will actually save money that would otherwise be spent on finance charges or late fees.
• Open key financial accounts. If your child doesn’t already have them, now’s the time to establish checking and savings accounts, and possibly even an IRA or other first investment account, if eligible.
• Continue, or begin, to save money. Remember, time is your child’s biggest asset. Even saving just $25–$50 each month adds up and helps develop a discipline that can pay big rewards in the long term.
• Don’t forget about insurance. Shop around for affordable health, auto and renter’s insurance policies. Health and auto insurance are must-haves.

 

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of savings and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction or strategy for his or her own particular situation. The examples mentioned are for informational purposes only and are not intended to represent results you should expect in the future. Data contained here is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.