As high school graduates move out of the house and off to college they are often bombarded with new financial situations including figuring out how to spend their money, credit card offers, savings and student loans.
I’m a firm believer that if students were taught while they were young a few basic principles, there would be far fewer financial problems. Here is a list of what I believe all high school students should know before they graduate. (The Academic Advantage also shares some tips.)
If you can’t afford it, don’t get it: Whether you buy an item on cash or credit, if you can’t afford it you shouldn’t be getting it. This one lesson alone will save hundreds from falling into the pit of debt.
If you really want it, save up for it: Don’t just charge it on a card. You’ll end up paying more for the item than if you’d just have paid for it with cash. Learn to put off pleasure until after you can afford it. You’ll feel much better later on if you spend your own cash on something you want after you’ve earned.
Create a budget: Although this is perhaps one of the most cumbersome aspects of managing your finances, it’s essential. Creating the habit of writing a budget at the beginning of every month is a habit that more than makes up for its time commitment.
Many high school students carry around fake babies for a week to discourage them from getting pregnant as a teen. The same attention should be offered to debt and financial responsibility. Teach kids how to create a budget so they don’t get trapped in an unwanted situation later on.
Balance a Checkbook: Really, it’s not that hard but do you know how many people can’t balance a checkbook? They think that just because everything is online, they don’t have to worry about it. This goes closely with creating a budget.
If a student learns to balance their checkbook along with maintaining a budget they are less likely to be surprised by an overdraft fee, at the very least they’ll be prepared for the overdraft fee.
Just say no: We teach them to say no to drugs or unwanted sexual advances we should teach kids to say no to credit cards too. Just because they are offered a credit card doesn’t mean they have to take it.
They can say no to debt, to purchasing things they can’t afford and to spending money without paying attention to where it’s going. If teens were taught before they were tossed into the big bad world full of financial decisions they would be much better prepared to handled themselves and make far fewer mistakes than their parents.