High school life is FULL of choices and change. Students trying to figure out where they want to go to college, playing sports, joining extracurricular clubs, and just life overall. With everything going on, its easy to overlook any thought to finances since realistically speaking, most high school students are limited to allowances or income from a part-time job. If you have a job or even an allowance; it is time to start learning about financial planning for your future. When you are in high school, the financial choices you make can affect your adult life, so learning some smart financial planning tips now is crucial.
Isn’t High School Too Early to Worry About Financial Planning?
Many people started financial planning many years ago but might not even realize it. Every time your coins were deposited in a piggy bank, a financial plan was born. Saving for a cool toy or designating your savings as a college fund was the goal of your financial planning. Now, during high school it’s time to use some savvy financial planning with your new-found income from a part-time job or even the savings you manage from your allowances, birthdays and even gifts.
10 Financial Planning Tips For High School Students
1. Learn the Basics of Budgeting
A budget is an estimate of income and expenses for a set period of time. Sticking to a budget is a crucial part of financial planning. It allows you to take control of your money to reach your financial goals. Learning this in high school with your first job will lead to future financial success.
2. Extend Scholarship Searches Beyond High School
Many students might not be aware that you can actually apply for scholarships while you are attending college. Do not hesitate to keep searching for scholarship opportunities every year you are in college. This is a savvy financial move that can save you thousands over four years.
3. Set Small Term Financial Goals
Developing good money habits is a breeze when you set it as a priority when you are in high school. Getting the experience from setting small, achievable financial goals when you are young helps you meet and even succeed in your long-term financial goals later
4. A Savings Account is Your Friend
High school students need a savings account they can turn to when they have an emergency. This is especially important once they are away at college. Relying on a line of credit will only bring additional monthly expenses for repayment, but having a stash of money you can count on with no fees attached is savvy financial planning.
5. Learn How to Budget with a Small Amount
No matter how much money you have, financial planning still works! From a $ 20-a-week allowance to real income from a summer job; learning how to budget is the key to making the most of whatever amount of money you have. This will help you understand the value of each dollar you spend and save.
6. Get Comfortable with Banking
If you are in high school and don’t have a bank account – open one now. Learning how to manage your finances via banking (online and in person) is a skill everyone will need as an adult. Learn the difference between checking and savings accounts; debit and credit cards; and how to access and protect your money.
7. Not all Debt is Bad Debt
Understanding how debt works is important to help you make smart money choices. Bad debt includes things like high-interest credit cards, new car loans, and student loans that can go on for years after graduation. Build your financial foundation instead with good debts like a home mortgage or personal loans with lower interest rates for best results. Understanding how to best use debt is important now and in the future.
8. With Great Power Comes the Potential for Debt
Often high school and young college students can easily get credit cards, which can lead to a financial disaster. Racking up a credit card with thousands of dollars of debt with the assumption that you will get a high-paying job after graduation is a mistake. There is no way to know exactly what your salary or expenses will be in the future and that might not allow for the repayment of frivolous spending in college. Making sure you are responsible when using your credit card is key to ensuring you don't rack up a ton of bad debt. Using tools like my money manager can help keep you on track.
9. Start Building Your Credit
The best way to build your credit is to accumulate good debt and make timely payments so that you can increase your credit score. This proves your creditworthiness and allows lower interest rates on loans. You will reap the benefits of a good credit score when you are looking to purchase a new car, rent an apartment, or even apply for a personal loan.
10. Set Aside a Little For Fun
Be sure to reward yourself for your savvy financial planning by setting aside some money for fun. Good budgeting includes a little money for your wants, needs, and savings
Financial planning for High School Students Makes Good “Cents”
It is much easier to prepare for a bright financial future when you adopt healthy financial habits when you are in high school. Some savvy financial planning when you are young will go a long way in helping you reach your financial goals as an adult. Starting early with a checking account that offers rewards and even cashback will help get you started on a successful financial journey. If you have questions about which account is best for you, feel free to contact Finex Today!