Have you noticed that most financial tips are always targeting people who are already in a financial mess? How about focusing on young people. To avoid the financial messes of the future it is important to train young people to handle their money well.
The best time to learn about financial management is when you are still young. You will be surprised that even kids understand the basic concepts of saving and being paid for their work like chores. Whether its allowance or money from a part-time job, teaching kids in high school about money tips is a smart move.
The good news is you don’t have to introduce the complex stuff first. You can begin with the basics. If you are in high school, here are some practical tips that will help you learn how to manage your finances now and in the future.
You Are Never Too Young To Start Saving
You should already have savings and be planning for your retirement. Even as young as 7 years, you should already know the basic concepts of saving money. Start with the allowance you get each month and watch it grow.
Do you have a prom coming up? Why not save money and buy a nice dress for yourself? This is a way of teaching financial independence. Your aim should be to work towards having long-term savings. This money can even be used as a down payment for your first house or to help pay for college.
Consider Compound Interest
Compound interest can motivate a stubborn child who loves to spend to start saving. All they need is to understand the basics and how the whole thing works. You can make use of this calculator to help you calculate how much you can earn once you start saving. Remember, the more money you save, the more it grows.
Paying For College Doesn’t Mean You Incur Debt
Whereas most people think that to finish college you must outa loan, this is not always the case. There are several universities and colleges that help students avoid sinking into debt. Some even offer education for a fraction of what private colleges ask.
The choice is yours to make. You can take up a part-time job and earn while studying, you can go to a cheaper school, and you can spend time applying for scholarships.
This is not to downplay student loans. However, sometimes these debts can be avoided. Moreover, students should not look at loans as the only means for them to go to college.
Save Towards Your Emergency Fund
Perhaps you think you are too young and an emergency fund is not needed. However, the truth is, everyone needs an emergency fund, regardless of their age. See, nobody knows when bad news will come knocking on the door.
It would be best to save before you graduate from high school. College comes with its own baggage’s and this money can be channeled towards that.
If you think it will be hard to save on your own, consider having joint savings account with someone you trust like your parent. Who knows, they might even chip in now and then. Regardless, they can help hold you accountable.
A Car Is Not An Investment
When it comes to young adults, the first thing they always think about is buying a car. However, if there is anything that depreciates within hardly any time, it’s a car. Therefore, if you need to buy a car, do not plan on getting much money out of it when it comes time to sell it.
If you are still in high school or know anyone who is, then its high time to start educating and empowering them about money matters. See, if these tips are not learned at a young age, then chances are, they will never even be learned.