4 Money Lessons I Wish I Knew in High School
Only five U.S. states require high school students to complete a personal finance course to graduate, which means most young adults are at a disadvantage when it comes to learning basic money management.
While the state where I attended high school received a “B” for its overall financial education, I felt there were still large gaps in my financial education. So I asked, “If I could go back to high school and give myself financial advice, what would it be?”
Here are the four money lessons I wish I learned in high school.
#1: Saving something now, is better than saving nothing.
Budgeting and saving were the hardest lessons I had to learn as a young adult. While I worked a part-time job and was responsible for a few bills, there was little keeping me from spending my entire paycheck the moment it arrived.
And, while I had fun spending my money, I also had a lot of surprise expenses in my early 20’s and having savings would have made those situations less stressful.
If I could give myself advice about budgeting and saving money, it would be:
· Practice the 50/20/30 rule now. 50% of my income should be spent on my needs, 20% on wants, and 30% in savings.
· Get comfortable budgeting now. Build a budget online and stick with it.
#2: Learn more about my credit score and how credit cards help it.
When most young people turn 18, the credit card offers start rolling in the mail. It’s important to have a handle on the basics of a credit score and how they work; it can be really beneficial to one’s credit score long term. Like many young adults, I barely understood what a credit score was and how much a missed payment or bad spending habits could affect it.
If I could go back and give myself one piece of advice about credit cards, it would be:
· Credit cards are not for purchasing a large item I can’t otherwise afford! They are for strategic building on my credit score.
· Make small purchases I already pay for in a month (gas, food, phone bill), and pay my credit card balance every month.
· Make sure I include any credit card interest in my monthly bill.
First credit cards can be tricky to navigate. Learn more about credit management with our free credit management resources.
#3: Budget a little bit of money to pay off student loan interest while I’m in school.
I know, I know, college is expensive. Especially if you attend a large, public or private university. No one can really afford making another payment during the school year, especially if your situation was like mine, one of the 4 out of 5 college students working at least part-time to pay for school and other bills.
However, designating a small amount of my budget a month to start paying off the loans accruing interest while in school would really lighten my debt repayment after graduation.
If I could go back and give myself advice on paying for college, it would be:
· Start saving early! I could have started saving at any age, and high school would have been a great time to start thinking about paying for higher education.
· Talk to my guidance counselor or school administration about applying for college scholarships in high school. (And don’t depend on all my college financing to come from FAFSA.)
Get information on financial aid, educational webinars, and student loan information with the Student Choice Learning Center.
#4 Know the real cost of car maintenance and emergency repairs.
A budget-busting mistake many high school and college students can make is purchasing a vehicle that’s affordable, but maybe not in the best shape, and can end up costing hundreds to thousands of dollars in unexpected repairs.
I had the same car from high school through college and while I brought it in for regular maintenance check-ups, I had a hard time affording the repairs for bigger issues when they happened.
So, what costs should you consider when it comes to your vehicle?
· Auto insurance. This cost may fluctuate depending on the insurance company and the make/model of the vehicle you have.
· Personal Property Taxes. See if your sate collects this tax annually.
· Car maintenance. Are you driving this car across the country for school? How long has it been since your vehicle had new tires?
If I could go back and give myself advice on car costs, it would be:
· Get a yearly checkup on the car—even if it’s running fine.
Navigating your financial future doesn’t have to be scary. Check out more free, easy-to-use resources the credit union offers.