Wouldn’t it be amazing if in high school American students learned valuable personal finance skills like budgeting, how to use credit cards, how health insurance premiums function, and other wisdom?
Although some high schools throughout the country do offer courses in Financial Literacy, it is generally an elective course that is not available at every school. The youth of today are very much on their own when it comes to managing their money. Lucky for them, they have an amazing resource in the internet where they can learn helpful tips like the 5 below that can aid them in having a secure, successful financial future.
Tip # 1: Know Where Your Money Goes
The idea of budgeting might pull up images of your grandma sitting at her kitchen counter pouring over the newspaper for coupons. Luckily, it does not have to take that much time or energy these days. Budgeting is primarily about understanding where your money is being spent, which can look different for each individual. Some prefer the old school method of keeping receipts and writing down expenses in a notebook, lots of people use budgeting apps, and many others simply view their online bank statement to get a handle on where their expenses lie. Understanding where your money is going can help you mitigate any unnecessary spending so you ensure you have money for the things you truly want and need.
Tip #2: Practice Self-Control
I understand you *want* DoorDash 7 days a week, but do you really need it? Sadly, the answer is probably no. Sometimes being an adult means doing the boring thing and packing a home lunch to the office and not being able to attend every single event your friends go to. “But I have a credit card?” You say, hopefully, eyes gleaming staring at the new PS5 you want to buy. Part of practicing self-control is realizing that making purchases you cannot afford on credit is not a smart money habit. Living within your means and enjoying moderate splurges is a much better long-term plan.
Tip #3: Understand Taxes
Knowing how taxes and tax brackets work can be very beneficial in comparing jobs and salaries. Let’s say you make $35,000 at one job and $41,000 at the other job. A $6,000 raise? That’s a no-brainer! However, if the $41,000 job puts you in a higher tax bracket then that $6,000 may turn to $4,195 instead. It’s still higher paying, however, if there are other factors like benefits, commute, or culture that would cause you to pick the $35,000 job then you may find yourself not as swayed by the money because it’s not as much of a raise as you think it will be on paper.
Tip #4: Don’t Go To College (Maybe)
It’s no secret that college is expensive. If you are dead-set on a specific career that requires a degree then it makes sense to spend the time and money to invest in that field. However, if you are recently graduated and have no clue what you would like to do then it may be worth it to begin a career out of high school and avoid debt for something you may not utilize. If further down the line you decide a degree will be worthwhile to enhance your career, or find a new one, then you can always make the investment at a later date, however, you can’t reverse the fact you went to college and erase your student debt if you decide college was not worth it for you.
Tip #5: Take Advantage of Health Insurance
Signing up for health insurance can seem outrageously expensive. Paying monthly premiums for something you don’t really use can feel pointless and a waste of money. However, nothing can compare to the cost of a serious injury or illness while you are un-insured. If your employer offers health insurance, be sure to take advantage and sign up, even if you are in top shape because you never know what will happen tomorrow. You don’t want to find yourself in medical debt because you didn’t spend a little now to save a lot later.
To Sum Up
A lot of being financially secure comes down to a little knowledge and preparedness. You don’t need to spend your entire life agonizing over every penny spent and constantly analyzing your net worth, but understanding your basic financial situation and being somewhat cautious with your spending while you’re young can help ensure you have a stable, comfortable financial life.