For most of us, school days were spent in a classroom talking about a quadratic equation or the method used to multiply two binomials. It’s knowledge we all use on a daily basis nowadays, right? Maybe not so much. But what about managing money? Where were the high school lectures about that? Since it’s never too late to pick up the skills needed to make money work for you, here are some financial lessons that should be taught in school:
How Interest Works
High school seniors should graduate knowing that compound interest could be their best friend or their worst enemy. When borrowing money, it may come as a surprise to young adults just how much it really costs. On the flip side, investing wisely into things such as CDs or money market accounts could be the road to financial success. That distinction should be abundantly clear to every high school student in the country.
How to Invest in the Stock Market
At first, the stock market might seem incomprehensible and something that can only be understood by people with advanced degrees in business and finance. However, that is not the case. Anyone can invest in the stock market, but knowing how to go about it will make a big difference. Even though it may be confusing, it’s a beneficial thing for students to know about.
How to Create a Budget
Even though high school students may not be earning a lot of money, they shouldn’t be freely spending what they do earn. Learning about how income, fixed expenses, savings, fun money and life events affect a monthly budget is a very beneficial lesson that can open students’ eyes as to how much they earn versus how much they spend.
How to Balance a Checkbook
Even though debit cards and online banking are on the rise, students should know how to balance a checkbook or at the very least review their monthly statement for discrepancies. This essential financial tool is all about knowing how much money you have, especially after making a deposit or large purchase. When students get the hang of balancing a checkbook, they’ll have a better grasp of money management.
How to Understand Your Credit Score
A poor credit score can affect the chances of purchasing a car, getting a mortgage or even qualifying for a mobile phone contract. Students should know how to best start establishing credit, the importance of checking their credit reports regularly and always be aware of what will impact their scores. By getting a head start on their credit as students, it will help them have the lifestyle they want later in life.
How Loans Work + How Much They Cost
Most high school graduates find themselves face-to-face with student loans for college, but do they know what that means and how much it will cost them? Students should know that typing “amortization calculator” into Google will give them everything they need to calculate how much their college options will cost, how much that dream car breaks the budget or why splurging on that mansion right after college isn’t the best idea. Just because student loans are considered “good debt” doesn’t mean you shouldn’t have a payoff plan.