Learning how to effectively manage money can make a huge difference in high schoolers’ lives. If not immediately, then certainly later on in life.
But they don’t often get the lessons they need. Not in school, and not at home, as one high school student wrote on Reddit this week. In her post, she said she wasn’t sure what to do with whatever money she gets, and is often inclined to spend it.
U.S. schools rarely incorporate personal finance into their curriculum. Only 16.4% of the 13 million high school students across the country in 2017 were required to take a personal-finance course to graduate, according to Next Gen Personal Finance. When the five states that mandate a personal finance course are eliminated, that figure drops to 8.6%.
1. Always save, but know how to invest too
Saving is a great habit, but it may make sense for people to begin investing their money sooner rather than later. Much more than half (66%) of people aged 17 to 29 years old (and 65% of those 30 to 39 years old) said investing in the stock market is scary or intimidating, compared to 58% of respondents aged 40 to 54 and 57% of people 55 and older, an Ally Financial survey found.
2. Understand your college financing options before applying to the school.
The average college student graduates with almost $28,000 in student loans, and student debt across the country just hit $1.5 trillion. High school students headed to college often don’t understand the impact their decisions on various loans (or the chosen college’s price tag) have on their futures, and surveys often find student loan borrowers tend to regret their financial decisions after leaving school.
3. Understand how credit scores work.
High schoolers should know that a late payment could trigger a fee and lower your credit score. Grace periods for a late payment aren’t that nice: if you have 18 months to pay something off without interest, they must understand the true cost of taking 18 months to pay for an item.
Minimum payments won’t help you if you’re racking up the debt; and no-limit credit cards still have limits.