High schoolers, as they always have, still separate themselves into familiar cliques based on the interests they share with just a select few peers. But the vast majority of high school seniors, no matter how unique they might be, share one crucial trait in common:

At some point in 2024, they've turned—or are going to turn—18.

It's a pivotal age of independence that ushers in both quite a few freedoms—and quite a few responsibilities. You can vote. You can make your own health care choices. You can get married. You can even buy a lottery ticket (though we'd suggest other uses for that money).

And as we'll talk about today, it's also arguably the most important age as it pertains to your relationship with money.

The Tea

April showers bring May flowers, and May flowers … well, they mostly set off everyone's allergies, but they also herald high school seniors' last few weeks of school.

A pretty hectic and transformative time is at hand. For many, it's the last few weeks in a familiar setting with a familiar schedule and familiar friends. After that, it's a few months of freedom or summer jobs, followed by a new setting for most, be that college, trade school, or even a jump into full-time work.

Regardless of where today's high school seniors end up later this year, though, most will have some level of newfound independence—and with it, some level of financial responsibility. That won't be the same for everyone. Some kids might go off to college and only need to scrape together bee … er, pizza money. Others might be required to start paying a few bills. And still others might be completely on their own.

Whatever their situation, anyone turning 18 this year should be building a basic financial infrastructure for themselves—a few basic necessities, some of which they can start working on before age 18, and others that unlock as soon as you turn 18. 

The Take

Today, we're going to provide a short checklist of five financial essentials you should be working on as soon as you turn 18 (or, where possible/legal, before then). It's not meant to be a comprehensive list of everything money-related you'll come across in adulthood—oh boy, are you going to have fun with mortgages some day!—but instead a simple backbone that will help you save, manage, grow, and spend your money.

1. Open a checking account / debit card

You need somewhere to keep your money that isn't a plastic pig or the underside of your mattress. 

The traditional bank 1-2 punch is the savings account and checking account. The former allows you to stash cash you won't necessarily need right away (and typically grow it with a decent amount of interest). The latter is a place to hold any funds you expect to spend sooner rather than later, and it typically also lets you receive checks directly from your employer. Once upon a time, checking accounts only came with … well, checks. But today, they're also tethered to debit cards, which offer the go-anywhere convenience of a credit card but directly debits purchases from your checking account. 

If you already have one or both of these accounts, that's normal—parents can open up bank accounts for minors, give debit cards to their teens, and even share banking apps with their kids. But you can't do any of that for yourself until you turn 18. 

If you're 18 and don't have any bank accounts, get it done. It's not difficult. You can even open an online checking account and/or a savings account from the comfort of your home.

2. Monitor and build credit

Age 18 is also when you begin to develop a credit score. 

A credit score is like a measurement of your financial health and track record of paying back debts. It's compiled by a trio of credit reporting agencies (CRAs): Equifax, Experian, and Transunion. These scores don't necessarily have a huge effect on your life right out of high school, but they will in a few years—and they make a huge difference. Credit scores not only help determine what interest rates you'll be charged on anything from credit cards to car loans to mortgages … they determine whether you'll be accepted for those and other things (like renting an apartment) at all! 

And like with just about any kind of score, you have to work hard to build up a high one, and you'll probably want to keep tabs on it as you go.

So, how do you build credit? Well, the most common methods are making timely payments on credit cards, or installment loans like auto loans, student loans, or mortgages. Of course, it's difficult to get most of those when you're fresh out of high school. Thus, many people start by getting a secured credit card, or even being an authorized user on a parent's credit card.

You'll also want to take up credit monitoring—not just to see how your efforts are helping your credit score progress, but also to make sure that you're not falling victim to identity theft and other scams that could hurt your score. By law, you can actually receive a free credit report every year from all three bureaus. You can do this in several ways, but the easiest way is visiting AnnualCreditReport.com, which the site notes "is the only website authorized by the federal government to issue free, annual credit reports from the three CRAs." 

3. Learn how to budget/start budgeting

As soon as you begin to have any financial responsibilities—whether you're completely independent as soon as you're 18, or whether your parents just ask you to pay your cellular plan every month—you need to know how to put together a basic budget. In the simplest terms, a budget shows you how much money is coming in (you're earning) and how much money is going out (you're spending). 

WealthUp Tip: No credit history? That's no problem for these credit cards.

A student's budget might be as simple as making sure the few hundred bucks you're earning from working at the college bookstore is enough to cover your car insurance and three off-campus Chipotle meals a month. But actually making a habit of putting that budget on paper (or screen) can make a world of difference when you're balancing a full-time job and side gig with your rent, electricity, gas, water, garbage, insurance, groceries … you get the picture. (If you've never done this before, here are 10 simple steps on how to create a budget in Excel.)

By the way: You can make a budget as early as you want. But it typically requires you to have some sort of income, whether you receive an allowance or …

4. Get a job

Age 18 is also important from an employment perspective, as it effectively removes all the guard rails—you can work just about any job you want, for as many hours as you'd like, as soon as you become an adult.

But let's be very clear: We are not saying that, as soon as you turn 18, you need to find a job. In fact, it's very possible that, for a few of you, your parents will forbid it—after all, it could weigh on your grades. But before you turn 18, or during college if you can wing it, or during summers, or at some point in the nebulous future, you should learn about what comes with being employed and bringing in an income. 

The upside? You're young. And there are tons of fun, engaging, and low-stress ways to make money as a teenager.

5. Open an investment account

Of all the things on this list, opening an investment account will provide the least benefit in the short term. In fact, you'll probably think it's a drag. But doing so could be the most impactful long-term move you ever make.

You can learn a lot more about the benefits of investing here, but in short, a little money invested today can grow into a lot of money when you're older, allowing you to finance things like a wedding, a home, or a comfortable retirement.

Much like with bank accounts, you can't actually open an investment account yourself until you're 18, though parents can open them for you—for instance, these investing apps are particularly popular among teens.

Regardless of whether you're under 18 or just hit adulthood, though, we strongly suggest starting with a Roth IRA (individual retirement account) over a traditional IRA. When you're young, you don't earn much, and that puts you in a low tax bracket—Roth IRAs take advantage of that by having you deposit money that has already been taxed at your current low rates, then withdraw tax-free when you retire. Regular IRAs are better for when you're older and in your peak earning years. You deposit money before it's taxed at your high rates; when you withdraw it in retirement, it's taxed, but likely at lower rates.

(By the way, Roth IRA contributions can be withdrawn tax- and penalty-free for any number of needs before retirement, like making a home down payment, buying a car, and more!)

WealthUp Tip: How much do you need to save to retire comfortably? This guide can help you figure that out.

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OK. We're sure we've bummed you out enough by now, so we'll call it a day. Enjoy the rest of your weekend—and the rest of your senior year!

Riley & Kyle

WealthUp (Young and the Invested is now WealthUp)

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