Once the car has been unpacked, the dorm room bed has been made, and the tearful goodbyes have been said, it’s time for a college freshman to start “adulting.” Some students have the life stills they need to thrive in college, but many flounder. While college can provide the safety net that allows freshmen to figure it out as they go, getting started on the wrong financial foot can create havoc in a student’s life. Luckily, there are steps families can take to prepare their high school students for financial independence.

1. Practice money allocation.

The opportunity to teach budgeting (and a few other life lessons) presents itself as soon as a child has money to call their own. Say a child receives one dollar per week for allowance. Teach them to set aside 25 cents in a container marked “savings” and 25 cents in a different container marked “charity.” That leaves 50 cents of spending money. Money received as gifts for birthdays or other holidays can be portioned out in some way, as can money earned as they get older. This lays the foundation for learning how to budget. Plus, watching the funds grow instills the value of saving and the joy of philanthropy.

2. Open a savings account.

Students should open up a savings account as soon as they’ve collected enough for the minimum deposit. Wells Fargo offers Way2Save savings accounts with a minimum $25 opening deposit, and no fees for account holders under 18. Savings accounts for minors can be set up in one of three ways: having joint owners (parent + child), “minor by” that allows the child to make deposits and the parent to make withdrawals, or Uniform Transfers/Gifts to Minors Act, in which an adult custodian has control of the funds until the child is 18.

3. Open a checking account.

It’s a great move toward financial independence to get started with a checking account around the student’s sixteenth birthday. At that age, the student typically has some spending money and is also responsible enough to hang onto a driver’s license and a debit card. This is an excellent opportunity to teach the student that a debit card is the same as cash, the importance of keeping a receipt until the transaction clears the bank, and keeping track of account activity via online banking. It also opens up room for a discussion about avoiding overdraft and other bank fees by reconciling their checking account and using good judgment in spending money. Many banks waive monthly fees for minors, though a parent or adult needs to be a joint owner on the account.

4. Get a credit card.

Although it’s tempting to prohibit opening a credit card account so that the student avoids the perils of credit card debt, take a minute to reframe the discussion. Talk about the importance of building a credit history, the components of a credit score, and how a credit score can determine whether or not you can rent an apartment, buy a car, or even get a job. (FICO has great information you can share.) Teach the student that using a credit card responsibly – by charging an item or two each month and paying the bill on time – helps to build their credit score without costing them a dime in interest.

5. Avoid student loan debt.

Most college-going high school seniors and their families assume that student loans are a necessary evil. They’re not. And they won’t move the student toward financial independence – just the opposite. By thinking outside of the box when developing the student’s college application list, persevering in applying for external scholarships, taking advantage of work-study and co-op education, and deciding where to attend based on the net cost, student loan debt can largely be avoided. This mindset reinforces earlier lessons about saving and spending responsibly.

Students who enter college having financial life skills are several steps ahead of the game. As they step onto their new campus and wave goodbye to their families, they’ll be well on their way to having financial independence – and will have mastered one of the most critical “adulting” skills around.

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