8 Key Financial Considerations Before Your Child Turns 18


Making all of the right decisions in your own life is hard enough.

You’ve worked hard to get your financial life in order and start an investment plan.  Then, you had beautiful children. You made sure you taught them about the value of money. You worried about their future time-after-time, tucked away savings for their college tuition, and even have a surprise stash you are growing in order to help them with their first major purchase.  

Today, that rosy-cheeked little baby or toddler who used to say you were “their best friend” is turning 18-years-old. They are adults ready to be released into the world, but you know they still need you in so, so many ways.

Have you done enough to prepare them financially for this moment?

Is there something you’ve overlooked? 

Let’s talk about it.


Here are some key things to address with your new adult when they turn 18-years-old:

1. Have a checking and savings account. Yes, I recommend both. There are 4 reasons you need a separate savings account. 

2. Unfreeze their credit. (Assuming you froze it for them as a child). If you aren’t sure what I am talking about, read this.  

3. Get a credit card with a small limit and set up auto-payments to pay the whole balance each month. 

4. Help them identify goals. They really can’t set up a good budget if they don’t have goals they are saving towards. I know… most 18-year-olds don’t want to sit down with their parent and talk about goal setting. Maybe just print and drop this worksheet off in their room and run. Or send them this blog on how to set realistic financial goals.

5. Make Power of Attorney Documents. No, it is not just “old people” who need to see an attorney to create a financial and healthcare POA. Think about it, if your 18-year-old was in an emergency situation, their bank, their credit card company, their doctor, and the courts may not talk to you. If they do, they might require a lengthy and expensive process to arrange it. Your adult child is a separate entity than you now and unless there is an POA document in place, there is no guarantee you will be able to make decisions to help them when they are unable to do so themselves. 

Hopefully, by now, you have your own estate documents created. Consider calling up your attorney with your 18-year-old and arrange a time to get their documents done together. 

6. Communicate Financial Expectations Clearly. Do you plan to help them pay for college? Help them with their car payments while they are starting out? Do you want them out of your home by a certain date? Do you intend to charge them rent if they remain in your home? The sooner you communicate your plans and expectations with your child, the better. They need to make informed life decisions, and you don’t want your indecision to hamper their success.  

7. File your taxes together. Please, please, please sit down with your child and help them file their taxes. Help them understand the concept of withholding, exemptions, and the standard deduction. Be sure they know what a W-2 and 1099 is. Most teenagers have low enough income to where they can file for free with services like TurboTax.  

8. Educate them on health insurance. Don’t send them off to college without an insurance card. Make sure they know how long they are covered under your plan, how to check to see if a doctor is in network, and how to pay a bill that comes in.  


I know this list isn’t perfect just like I know there is no perfect way to raise a great adult. I think it really comes down to helping your child be an educated, resilient, and resourceful individual. I really do think these points will help along the way. 

For those of you who’ve gone through the process of sending out adults into the world, do you have any additions? I’d love to get your feedback. 

Or… if you have any questions, contact me here.