8 Financial Skills You Should've Learned in High School
Do you feel like your financial high school education fell short? You're not alone. While there have been recent efforts to teach basic personal finances to high school students before they graduate, many leave high school without learning how to manage the basics or without solid financial skills.
The issue is compounded because many parents don't talk to their children about finances, either because they lack basic financial knowledge themselves, or because they are embarrassed by their current financial situation and don't want their children to know.
Read on for eight things every high school student should know about finances before graduating.
1. How to Balance a Checkbook
It may seem old-fashioned to balance a checkbook, especially with the financial software and online tools available today, but it is an essential financial skill. Here's why: You can't simply rely on the balance the ATM gives you or what shows up on your bank's online portal since these do not always show the most up-to-date amount in your account.
Learning how to balance a checkbook will help you keep a running tally of your checking account, which will make it easier to manage your money in the future. Worth noting: You should balance your account to your statement each month.
2. How to Set Up a Budget
A budget is the key to succeeding financially. If you do not know how much you are bringing in each month and how much you are spending, you are going to end up in the red.
Learning to set up a realistic budget and to plan for the future is essential to being successful later in life. Creating and sticking to a simple budget – whether it's the envelope system, a cash-only budget, or using a financial app such as You Need a Budget – is a key skill that all high school students should learn.
3. How to Pay for College
Most students assume that the way to pay for college is by using student loans. But there are options available including financial aid, scholarships (even if you do not get perfect grades), and work-study options.
Learning about how to pay for college – and not simply go into massive amounts of student loan debt – should be a required course for all high school juniors and seniors.
Putting it simply, all high school juniors and seniors should be educated on the many avenues to pay for college.
4. Cooking, Grocery Shopping and Other Life Skills
Although these things may not seem related to finances, basic cooking and other skills can save you a lot of money.
It is important to make sure you have the basic skills that can help you find the best prices and plan practical menus to get you through college and beyond. Other skills like doing the laundry, mending clothes, and other basic skills can help you make your clothes and other items last longer, which will save you money.
5. Basic Investing
A basic investing class can make a huge difference in how you handle your money in college and as an adult. Investing can be intimidating if you do not have a basic understanding of how the stock market works and how to choose basic stocks.
But learn basic investing principles in high school, and you'll start your investing career already ahead of the game.
6. Long-Term Financial Planning
Understanding the need for a long-term plan for your money is essential if you want to be successful financially.
So what does this mean, exactly? Essentially, it's learning how to set financial goals, then break them down step-by-step. This will set the foundation for working toward major financial goals later in life, like paying off debt or buying your first home.
Another long-term planning goal high school students should learn about? Planning – and saving – for retirement.
7. How to Build Credit and Manage Credit Cards
While many college students are targeted for credit card offers, chances are, they lack the basic knowledge on how to use credit cards successfully. That's because they likely weren't taught it in high school. But learning how to build credit and work to build your credit score is an essential life skill.
Credit cards are the downfall of many college students and other young adults. Many look at them as extra money instead of as a tool. Credit cards may be good or bad, depending on how you use them.
A good credit score can help you qualify for a good mortgage, get better interest rates, even pay less for car insurance, so it's important to manage your credit from the time you graduate high school and all throughout college.
8. How to Rent an Apartment and Pay Your Utilities
Many college students start out in the dorms, which means they do not need to worry about finding and paying for housing, as well as managing other household bills.
However, college dorms don't last forever, so it's important to understand how to manage renting an apartment and splitting the bills with your roommates.
Updated by Rachel Morgan Cautero.