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Let me guess, your high school doesn’t have a personal finance class. Am I right?
According to a 2016 Survey of the States,
- Only 20 states require high school students to take a course in economics – that’s less than half the country and two fewer states than in 2014.
- While more states are implementing standards in personal finance, the number of states that require high school students to take a course in personal finance remains unchanged since 2014 – just 17 states.
WHAT THE…! No wonder there are so many young adults struggling, living paycheck to paycheck. High school personal finance classes barely exist out there to prepare the masses. Sure, parents should be responsible for some of this. But let’s be honest, there’s a wide range of people in existence and many parents aren’t great examples or don’t have enough time at home because they are working multiple jobs to meet ends meet.
That’s one of the biggest reasons Mr. TYMP and I wanted to start this blog. If you look online for personal finance directed towards high schoolers, you’re going to come up short. But starting to focus on your finances in your teens will be a huge factor in your net worth*.
*Net worth is the value of all assets, minus the total of all liabilities. Put another way, net worth is what is owned minus what is owed.
High School Personal Finance Tools You Should Know About
Now when we say that you’ll come up short for high school personal finance or teen personal finance, that doesn’t mean there aren’t any resources. We’re here, aren’t we? But beyond this blog, you can find other resources if you are really committed to having money and living comfortably for the rest of your life. Some of those tools include:
- Personal Finance Curriculum – This is far from the sexy portion of personal finance, but building a solid foundation is a must. PwC offers an entire curriculum for teachers to use, so if you’re committed enough, try reading through it yourself. It’s a great way to get to know all the jargon without a formal class. While it might look overwhelming, just take it a section at a time. Plus, there’s a lot of stuff that really is specifically for teachers that you can just breeze over. Not interested? Subscribe to our blog and we’ll make the topics more fun to read about.
- Practice Personal Finances with a Game – If you learn through doing, try this personal finance game that is built for middle school and high school students.
- Interactive Calculators and Videos – Want to see the actual numbers in action? Use these cool interactive calculators and videos.
Let’s Get Personal
If I had to rate my parents on their financial lessons when I was a kid, I’d say a B+ (Mom, if you’re reading this, it was a typo…I meant A+++++). But seriously, while I was growing up we had a family business and I saw how hard my parents worked for every penny they had. While we lived comfortably, the value of a dollar was drilled into me so nothing was taken for granted.
As a girl I loved riding horses, which is probably one of the more expensive hobbies available. Luckily, I lived across the street from a woman who managed a horse farm. So we worked out a deal. I would shovel poop and she would let me ride and provide lessons. It wasn’t glamorous, but it taught me early on that you have to do the dirty work to get what you want in life. Starting from that and moving on to waiting tables, I was encouraged to save money and grow it in investments, which my parents and grandparents did for me. Now this is where I deducted some points for my parents. Since they used a investor, I didn’t really get a hands-on learning experience of how to grow my money.
10 Things Mama Should Have Taught You…
So maybe your parents aren’t as financially savvy or you just don’t talk money, here are some lessons to get you on the right path:
- Think about how long it takes you to make money (after taxes) before you spend. Let’s say you make $10/hour, after taxes we’ll call it $9 to make the math easier. So that means the next time you want to go buy a shirt that costs $27, it will have taken you three hours to earn it. Worth it? You decide.
- Learn about compound interest. Calculus might not be useful, but this kind of math definitely will be. It’s all about growing your money in savings and investments.
- Think about the big ticket costs in life. One day you might choose to pay for a car, college, a house. Well often times that means taking out loans. But a lot of people don’t think about the flip side of borrowing money. You actually have to pay that back with interest. This amortization calculator can give you a better picture of what that looks like. Say you want a car that is $23,000, but you need a loan to cover it. So you’re offered a 10 year loan at 5%. After 120 payments of $244/month, you’ll have paid $29,274 for the car. That’s an extra $6,274.
- Money sitting in a savings account depreciates in time. It’s a sad fact that even when you think you’re making money, the small amount of interest in a savings account is not enough to keep up the value of a dollar.
- Never spend money that you predict you are going to earn. Only buy when you have the money in your account.
- Be frugal. Just because your friends might be buying the latest gadget, doesn’t mean you have to. Plus, sticking to a budget, knowing how much money is coming in and going out, and making conscious purchases are all great habits to start right now.
- Take time to learn about the stock market. When you invest while you are young, you can be more daring, which can result in some big profits.
- Get a job if you don’t have one already. Even if you’re not at the legal age to work, start getting jobs like babysitting, walking dogs, housesitting, or whatever kind of odds and ends jobs you can find.
- Create a budget and understand delayed gratification. That means when you want to buy something choose instead to wait a while. After the period of time has passed assess whether or not you still want it. The goal is to buy things that will make you happy over time, instead of just making you happy at the time or around the time of purchase.
- Learn to market yourself. Okay, I know this doesn’t sound like a financial lesson, but it will pay off when you get older. Start learning how to sell yourself and your value now so that you can make more money at jobs over your lifetime.
We’re Here for You
High school personal finance doesn’t have to be scary. While it’s impossible to cover all the details in this one post, we’ll be covering all the lessons in more details in upcoming posts. So be sure to subscribe to the blog if you haven’t already.
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