• If you've got a recent high school graduate who's getting ready to head off to college or join the workforce, let me share a few lessons I learned the hard way about managing personal finances that you can pass along to your kids.
• Young adults are just starting to build their credit history. In the coming months they'll probably encounter many unfamiliar expenses - and many financial temptations. If they're not careful, a few ill-thought decisions made now could damage their credit for years to come.
• Here are several actions your kids can take to build good financial habits and strong credit - and a few minefields to watch out for:
• Probably the most fundamental tool to for young adults to help manage their finances is a basic checking account and debit card. A few tips to pass along:
• • Look for a bank/credit union that charges no monthly usage fee, doesn't require minimum balances and has conveniently located ATMs so you don't rack up out-of-network ATM charges.
• • Enter all transactions in the check register and review your account online regularly to know when deposits, checks, purchases and automatic payments have cleared.
• • Don't write checks or make debit card purchases unless the current balance will cover them - many transactions now clear instantaneously.
• • Banks must ask whether you want overdraft protection. If you opt for coverage, understand that overdrafts can be expensive - up to $35 or more per transaction.
• • Request text or email alerts when your balance drops below a certain level, checks or deposits clear, or payments are due.
• Credit cards for young adults can be a useful tool, but they must be used responsibly. By law, people under 21 must have a parent or other responsible adult cosign credit card accounts unless they can prove sufficient income to repay the debt. If you allow your child to become an authorized user or joint account holder on one of your accounts, remember that any account activity, good or bad, goes on both your credit reports, so careful monitoring is critical.

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