High school graduation is an important milestone that marks a transition into young adult life. Recent graduates face newfound freedom and many important choices, including whether to continue living at home or strike out on their own for the first time. For those who choose to stay at home, parents are left with the question: is it business as usual? Or should their high school graduate have some new financial responsibilities? Let’s look at some things to consider.

What’s the Plan?

Your new grad’s immediate-future plans should factor into deciding their level of financial responsibility. If they will only be home for the summer and then immediately heading off to live at college, financial arrangements probably don’t need to change much. But if they’re staying at home for school or don’t have plans to further attend school at all, you’ll want to get together as a family and decide what they will be responsible for financially.

Start Small

Many families find it makes sense to have the high school graduate take over responsibility for certain personal expenses, such as cell phones bills, clothing and entertainment. These are generally manageable costs, even for those only working part-time jobs.

For larger expenses such as a car payment, insurance and vehicle maintenance, consider splitting the costs half-and-half. Young adults will start to get a sense of the responsibilities involved, while you continue to offer a safety net.

Banking Basics

If your young adult doesn’t already have a checking account, savings account and debit card, now is the time to set those up and discuss using them safely and responsibly. Encourage them to pay themselves first by saving a portion of every paycheck – even if it’s just $20.

Chances are, they’re more comfortable using mobile banking and payment apps than you are, but it’s still good to talk about how to use them safely. You’ll also want to go over the importance of protecting their personal information and what to do if they suspect they’ve experienced identity theft.

Time for Credit?

Now is the time for your high school graduate to start building a positive credit history, but that doesn’t mean letting them go crazy with their own credit card.  Consider adding them as authorized users on one or more of your credit accounts. This will allow them to reap the benefits of your good credit habits — they don’t even need to use the card to do so. If you do allow them to use the card, set up rules and limits for what they can charge and how much they can spend. And make it their responsibility to pay for their purchases.

Allow Flexibility

Whether your high school graduate ends up staying at home in the short- or long-term, assigning them financial responsibilities is an important step toward creating financial independence. There will be some mistakes along the way, but making a late payment to the bank-of-mom-and-dad has fewer consequences than missing a payment to a creditor or landlord. If they choose to continue living at home long-term, expand their financial obligations as their income increases.