Helping Families Guide New Grads Toward Financial Success

Watching new grads graduate stirs deep emotions and brings back memories of their younger days. As a parent or family member, you’ve supported your graduate through years of learning and personal growth. Now, as they step into the next chapter of their lives, your role shifts, but your influence remains just as important.

One area where your guidance can make a real difference is helping them build a strong financial foundation.

“At David Lerner Associates, we understand the unique challenges and opportunities young adults face as they start managing their finances independently. Whether your graduate is entering the workforce, continuing their education, or exploring new paths, there are key habits and decisions that can shape their financial well-being for years to come. The earlier they understand the basics, the more confident and prepared they’ll feel as they take on new responsibilities,” advises Martin Walcoe, President & CEO, David Lerner Associates, Inc.

Laying the Groundwork: Budgeting and Cash Flow Awareness

The first step toward financial independence is understanding where your money comes from and where it goes. Many young adults graduate without ever having created a budget or tracked their expenses.

You can help by encouraging your graduate to:

• Create a realistic budget based on their income and essential expenses.
• Track spending using apps or simple spreadsheets, or whatever method they feel comfortable with to identify patterns.
• Set aside money for fixed obligations, like rent, insurance, and loan payments.
• Include room for savings, even in small amounts, to start building good habits.

Talk through how to prioritize spending—the difference between needs and wants, how to handle large expenses, and the value of living within their means. Consider discussing recurring costs they might not have dealt with before, such as utilities, phone bills, or subscription services. Encourage them to check in with their budget regularly and adjust as their financial situation evolves.

These conversations are most effective when they’re collaborative and nonjudgmental. You’re not solving the problem for them—you’re helping them build the tools to do it on their own. And don’t worry if they don’t get it right the first time. Budgeting is a skill that improves with practice.

Establishing Credit & Understanding Debt

Credit plays a vital role in a young person’s financial life, influencing everything from loan rates to apartment approvals.

According to recent Experian data, Gen Z (born after 1996) holds the lowest average credit score of any generation, making early action even more important. Yet many graduates don’t fully understand how credit works or how to build it responsibly.

Here’s how you can help:

• Discuss how credit scores are calculated, including the importance of on-time payments, length of credit history, and credit utilization.
• Encourage responsible credit card use, like paying off the full balance each month to avoid interest and maintain a healthy credit score.
• Help them understand student loan obligations, including grace periods, interest accrual, and available repayment plans.
• Warn against high-interest debt, such as payday loans or carrying balances on retail credit cards.

If your graduate doesn’t yet have a credit card, consider helping them apply for one with a manageable limit. Cosigning is an option, but it’s important to discuss expectations clearly. Additionally, for some people, tools like credit-builder loans or secured credit cards can be good options for those with no credit history.

Stress the long-term importance of building credit responsibly. A strong credit profile can lead to better rates on car loans, approval for rental housing, and even potential benefits when applying for jobs in some fields. Starting off with smart habits makes all the difference.

Starting Early with Saving & Investing

Saving money is often easier said than done—especially when paychecks are small and expenses are high. Still, getting in the habit early has long-term benefits. Even modest, consistent saving helps establish a financial buffer and creates space to pursue future goals.

For instance, saving just $75 a month starting in your 20s could grow to over $100,000 by retirement, depending on how it’s invested.

Encourage your graduate to:

• Open a high-yield savings account to build an emergency fund.
• Set savings goals tied to tangible milestones, like moving expenses, travel, or future education.
• Start contributing to retirement early, especially if their employer offers a matching program.
• Learn the basics of investing, including the value of compound growth and the importance of time in the market.

A 2024 National Retail Federation survey found that over half (52 percent) of respondents plan to give cash as a graduation gift. Instead of just handing over money, inspire your graduate to use that gift to build smart financial habits. Consider creative alternatives like matching their savings contributions or gifting shares of stock in companies they admire.

Teaching the Value of Professional Support

One of the most impactful lessons you can teach your graduate is that they don’t have to figure everything out alone. While it’s great to be independent, there’s also value in knowing when to ask for help. Talking with an investment counselor isn’t about handing over control; it’s about gaining insight, building a plan, and having a partner along the way.

Encourage your graduate to:

• Ask questions, even if they seem basic.
• Think about both short-term needs and long-term goals.
• Explore different financial tools and resources.
• Schedule an initial conversation to see what guidance might be helpful.

David Lerner Associates works with clients at every stage of life, including those just starting out. Our investment counselors offer practical advice on saving, investing, and managing debt in a way that aligns with your graduate’s life stage and ambitions. We focus on education as much as strategy, helping your graduate make confident decisions as their situation evolves.

Consider making an introduction or attending a first meeting with them. Sometimes having a trusted family member alongside makes it easier to ask questions and engage.

Prepare for the Next Generation of Graduates

Supporting your graduate doesn’t mean giving them all the answers. It means encouraging curiosity, building good habits, and pointing them toward resources that can help them succeed. Your ongoing support, combined with timely professional guidance, can help your graduate feel empowered rather than overwhelmed. You’ve helped them get here—now it’s time to support them in building what comes next.

If you’re looking for ways to help your new graduate take their next financial step, consider connecting with a financial professional from David Lerner Associates. We can help them build a strategy that grows with them—one that supports both their goals and their independence. Reach out today to take the first step together!

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Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.