6 Personal Finance Lessons I Wish I Learned in High School

Personal finances can be a very tricky subject. If I knew everything I know now about finances, I would be much further ahead at this point in life. I didn’t learn one money skill in high school that would apply to my everyday life as an adult. Here’s a few finance essentials that all high school students should learn in order to build a strong financial foundation.

1. Credit cards and Interest Rates

When I was in college, I opened credit cards regularly without realizing the long term consequences of interest. Credit can be a useful tool when you know how to properly pay back every dollar you charge. Your interest rate can ruin your financial picture, especially when buying things you can’t afford. I learned this the hard way and by the time I was in my early twenties, I was thousands of dollars in debt that took years to pay back.

Credit 101 should be a mandatory course in high school. Credit card companies have made billions of dollars on interest alone from financially uneducated youth who don’t have an adequate grasp on how to properly manage credit. 

2. How To Balance A Checkbook

Balancing a checkbook is a lost art. I grew up watching my grandmother balance her checkbook on Sunday mornings before church. She would always start breakfast, then sit down in front of the television with her calculator and checkbook. 

With the rise of online banking, there seems to be no need to learn how to balance an old-fashioned checkbook but all transactions aren’t posted immediately by the bank. Weekends are a critical time to keep up with your spending, because the banks usually do not update your bank balance in real-time during non-banking days. If you’ve written down these transactions in your checkbook, you won’t have the dreaded worry of overdraft fees, etc. This would have saved me hundreds, maybe thousands of dollars if this was taught in high school.

3. Budgeting Basics

Budgeting is so simple that it is more commonly overlooked than taken seriously, especially in high school. Tactical budgeting can help you achieve your financial goals and save money over time. I have written about budgeting in the past, and I will continue to write about it so get used to it. 

If you don’t have a budget, you’re playing Russian roulette with your personal finances. My wife is a huge advocate for budgeting (how ironic being that I’m the accountant in the marriage) and she actually taught me how to devise a proper day-to-day budget in my early 20’s. Imagine how much money I’d have in my interest bearing savings account if I would’ve taken a budgeting course in high school. 

4. Compounding Interest

In high school, we all have one thing in common – time is on our side. The time value of money is something that I was not taught until my second year of undergrad at Texas Southern University. Opening an interest-bearing savings account is a great idea for anyone who’s planning on securing their financial future.

Tapping into the power of compounding interest can be the difference in retiring at 40 while your friends are working well into their 60’s. I don’t know about you, but I don’t want to be the old person who didn’t think about their future until it was too late.

5. Investing in the Stock Market

Millions of young people are missing out on building wealth by investing in the stock market. Apps like Robinhood are changing the narrative, making it easier for the everyday Americans to invest in stocks while not needing a lot of money. If you start early enough and continue investing, the sky is the limit. Research is key, so be sure to have a good understanding of the businesses you invest in. This will help reduce risk and ensure steady returns. The stock market is a long-term game, so it is very wise to start a portfolio as early as possible.

6. How To Plan For Retirement

Retirement should be a top priority for young people because it’s extremely expensive to do so. On average, the life expectancy for the average 65 year old is 19.4 years according to Bureau of Labor Statistics. In this 19 year span, the average American will spend about $987,000; high schoolers need to know this information. The reason why we get up and go to work each day is not solely based on loving our careers, but to also save for retirement. This is a huge factor in building a strong financial foundation, and is second to nothing aside from purchasing a home.

For all of my entrepreneurs, it would be a great idea to start to invest in an Investment Retirement Account (IRA). This is a retirement account that allows investors to make non-deductible contributions of up to $4,000 annually. There is usually a 10-15% fee for early withdrawals and many companies have flexible options for business owners.

Bottom Line

Building a strong financial foundation is the most important aspect of our adult life. Saving for retirement, building credit, and investing early in life gives us a great chance to achieve this goal. Teaching young adults to respect money and the power of compounding interest is a great way to ensure that our next generation is in a better position to make a difference in the world. So there you have it, six personal finance lessons I wish I had learned earlier that would put me in a better position financially – I strongly believe that each and every kid can learn to become financially savvy in the 21st Century.

About The Author

Eric Anderson
Eric Anderson is an Accountant and MBA holder based in Houston. His background includes 5+ years as an accountant, writer, social media marketer, and business professional.

This post has been edited by K. Assists.

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