Last week, I had the honor of getting to speak to a group of high school students about money. And to be honest, I was really nervous. I mean, it’s been 14 years since I graduated high school – which means that these kids were born while I was in high school!
My cousin is a teacher in Cleveland, OH and she requested that I talk to her students about money (through the awesomeness of the internet) to help prepare them. The funny thing about this was I honestly didn’t know what to teach them. I kept thinking, “this is so obvious, why am I including this” but my husband pointed out to me when I expressed my concerns “Jessi, did you know that in high school?”….”um, no” I responded. “They probably don’t know it either.”
And you know what? He was right.
So what did I talk about with these students? Well, a little bit of everything.
One of the big things was how credit cards work. Of course, I’m anti-debt and anti-credit card but I also know that at least one of these students will fall into the trap of “you have to have a credit card to build credit” despite my best efforts to educate them on the opposite. So I laid it out for them – all about how banks make money and how they design credit cards to carry a higher credit limit than what your checking account balance is so you’re tempted to overspend.
Because of course, once you’ve overspent and you don’t have the money to pay the balance off in full, what happens? You end up paying interest and interest is how banks keep the lights on.
This was one of those facts that I was afraid was going to be so obvious to them that they were going to roll their eyes or laugh at me about. But the contrary ended up being the truth – they had no idea! One student even responded, “that makes a lot of sense and I can’t believe that I never thought about that”.
And the truth is, that most adults don’t even think about it. Most don’t even realize that the banks earn income from the interest – that it’s in the banks’ best interest to make sure you don’t pay off your credit card balance every month or pay off your loan early. They lose revenue when you do.
Now, I promise I didn’t just go into a tangent (okay, maybe a little…I just couldn’t help myself) on staying clear of debt. I did talk to them about why they should budget and things they should keep in their budgets as high school students. Now, I know that you’re not in high school but if you have a loved one that is in high school, make sure you share with them the below.
Below I’ve bulleted out a few of the questions they had and my responses so you can see.
High School and Budgeting Q&A
Q: What is a budget and why is it important as a high school student to start doing one?
- A budget is just a plan for your money. Example: $100 – $20 (for hanging out with friends) = $80 to go towards saving for the future (a car, new phone, college, etc.)
- If you get into the habit of budgeting now, you’ll be better with money later in life.
Q: What are the 3 most important things a teen should budget for in life?
- The future – always be saving up for something in the future. (A car, college, something fun, etc.)
- Your hobbies or things you enjoy with your friends.
- Food/clothes/or anything else that you currently need.
Related Post: 7 Money Saving Tips You Can Use Right Now
Q: What advice do you have about credit cards?
- Avoid them at all possible costs. 🙂
- If you decide to use credit cards, you MUST pay off the balance in full every month or else you’ll go into debt and start paying interest.
- Interest is how banks earn money so they design credit limits to be high enough to tempt you into spending more money than you can pay off in a month so beware.
Q: What advice do you have about student loans and college debt-what should be the first thing a student should do after college?
- Avoid them if you can. Apply for every scholarship or grant that you can. Every little bit adds up.
- Do not take out more student loans than is necessary to pay for your actual education.
- Stafford loans are federal government loans and usually have a much better interest rate than private loans. Stafford loans are broken into subsidized and unsubsidized. Subsidized are ones where the interest is deferred until after you graduate (or drop out of college). Unsubsidized loans are ones where the interest starts accruing as soon as you take out the loan.
- Be aware of when your student loan payment first comes due so you don’t miss your payment date and always make sure you put “apply to principle” on any additional payments you make on your loans.
- This calculator here is awesome for figuring out how much to save for college: https://www.
savingforcollege.com/ calculators/worlds-simplest- college-cost-calculator
Related Post: How to Save Up a $1,000 in a Month
Q: What about a car and how to budget for that?
- Definitely pay cash for a car. Save up about $1,500 – $2,000 for a car and then after you buy that car, keep saving money towards another car then once you reach your goal, turn around sell the $1,500 – $2,000 car and apply the profit to your savings to go buy a nicer car.
- Always keep a line item in your budget for car stuff – oil changes, maintenance, tires, etc.
Other resources to look into:
No matter if you’re in high school or not, these resources are super helpful for keeping your money in check!
- Personal Capital (FREE budgeting software program).
- The Total Money Makeover (book).
- Real Life Money Plan® (shameless plug for my eCourse 😉)
- Ibotta (rebate app for earning rebates on everything from groceries to Amazon purchases.)
- Republic Wireless (the cell phone company we use – super affordable even with data!)
- Ebates (another rebate site but for only online purchases – my personal favorite.)
- Acorns (this account works like those “keep the change” savings accounts but is an investment account. It’s been super fun to watch my initial $100 investment from last year grow to now over $1,200 with very little effort on my part!)
Okay, so those are just a few of my favorite resources that’ll make getting your money under control manageable. Again, please feel free to share this post with anyone that you know in high school or even college if you feel it’s useful.
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