May 2024

Transitioning from high school to the next stage of life is a thrilling and pivotal moment for graduates. It's not just about stepping into adulthood; it's about taking control of one's financial future. As students toss their caps into the air, they also need to gear up for the financial responsibilities of independence.

According to a survey by EVERFI, a leading education innovator, students are not equipped to make critical financial decisions after they graduate high school and move into adulthood. Understanding and making informed decisions about budgeting, saving, credit and credit scores, and managing student loans are critical skills for students to master.

Setting up a budget for those fresh out of high school involves calculating expected monthly income against typical expenses. It's a reality check that can help avoid the pitfall of living beyond one's means. Follow these five steps to create a spending plan:

Get details on budgets in our Your Money Matters guide for high school students.

Make saving a habit. Identify an amount that you can comfortably save each time you get paid. As saving becomes routine, you’ll be better positioned to increase your monthly savings as your income increases. The earlier and more frequently you save, the quicker your money will grow. Starting early gives you the opportunity to take advantage of compound interest. Compound interest is when interest earns interest — that’s free money! Check out our Your Money Matters guide for high school students for more information.

While having a credit card may not be necessary, developing a positive credit record is a good idea. Landlords, employers and insurance companies all use your credit history to judge your character and to decide whether or not they want to take a risk on you. Your credit history will also determine how much you may be charged for premiums and monthly payments. Learn more about ways to build a solid credit record at our website https://www.oklahomamoneymatters.org/students/high_school/Credit.shtml.

Once you’ve developed a favorable credit history, strive to maintain it. Your credit score is based on the information found in your credit report and is the tool used by lenders to determine the likelihood that you'll repay the money you borrow. The FICO (Fair, Isaac and Company) score is the most commonly used, and ranges from 300-850; a higher score means you’ll qualify for lower interest rates. Review our “Ask OKMM” archive about credit scores for tips on improving your score.

A student loan is the first credit experience many students have. To protect your credit rating, take proactive steps to borrow responsibly and successfully repay your student loan. To better understand student loans, and your rights and responsibilities if you borrow one, download Ready Set Repay’s Borrow Smart From the Start brochure.

Financial literacy is the cornerstone of the high school-to-independence transition; it's the beginning of a financial journey. With the right tools, knowledge and support, graduates can set themselves up for a future that is not only financially secure, but also rich with possibilities.

Check out May's edition of Financial Friday, Oklahoma Money Matters' online personal finance question and answer forum. This month, we're answering a question about transitioning your finances from college to career.

As always, if you have money-saving tips you'd like to share, send us an email at OklahomaMoneyMatters@ocap.org or submit a personal finance question for a future edition of Financial Friday.

Mark your calendars for upcoming OKMM "Make It Count" webinars on the third Tuesday of every month. Join us and our friends from Ready Set Repay Tuesday, May 21, at noon as we discuss how to ensure a smooth transition to working life and your financial future. 

We offer webinars for educators, students and parents on budgeting, saving, credit, and more. If you want to schedule a webinar, complete our workshop form, and we'll contact you to plan the details.

Email: oklahomamoneymatters@ocap.org
Call us: 800-970-OKMM