Age 18-22: discussion guide for financially savvy children

A part of the Raising Financially Responsible Children series

The discussion guide and checklist will help you start financial conversations with your children by providing practical questions to ask, topics to cover and suggested activities to follow.

Some questions to help get the conversation started:

  • “What do you think are the pros and cons of an unpaid college internship versus a paid summer job?”
  • “How are your friends saving for a home while covering rent and daily expenses?”
  • “What is your desired career? Will it provide the income you’ll need to live on your own, or will you need to look for a roommate?

Financial topics to know:

  • Real-world budgeting – Use spreadsheet programs or expense tracking apps to set a realistic budget and stick to it. Learn how to compartmentalize expenses and put aside money for savings.
  • Work – Weigh the pros and cons of jobs that pay very little but have great resume potential and jobs offering college credit that could lead to early graduation. Consider an entrepreneurial opportunity. Ask yourself: What does wealth creation really mean
  • Managing credit wisely – Learn the importance of credit scores, how the credit ratings agencies calculate them and where to find them, and how to protect a score by using credit—for example, leasing a car versus buying one.
  • Planning for the future – Understand the benefits of saving as early as possible, using Traditional or Roth individual retirement accounts.

Activities to help teach:

  • Discuss “needs versus wants” by maintaining lists of goals and expenses. Consider whether some can be eliminated.
  • Draw up a business plan for a hypothetical business, including financial statements, a marketing plan, and a presentation to potential investors.
  • Order reports from the three credit reporting agencies. Compare scores and examine the scoring criteria.
  • Plan, save, and budget for a graduation trip across Europe.

Actions to reinforce financial focus:

  • Establish a savings account and understand the impact of compounding interest.
  • Obtain a credit card and learn how to use it conservatively.
  • Meet with the family financial advisor to plan for post-graduation.

The views expressed in the article are those of the author and/or person interviewed and do not necessarily reflect the views of Silicon Valley Bank, a division of First-Citizens Bank and First Citizens BancShares, Inc. The materials on this website are for informational purposes only, are subject to change and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein.