Money Lessons and Advice for High School Graduates
As you reflect upon the lessons you have learned over the past few years, here are a few more money lessons and advice for high school graduates. Just because you are a high school graduate doesn’t mean learning has to stop. Learning about money management, budgeting and just how money works cannot start too soon. This first step of freedom that you are taking can lead to an amazing future.
You did it! You made it through all of those years and have that diploma in your hands.
The world is yours!
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Money Advice for High School Graduates
So let’s have an honest conversation about money.
You are about to get bombarded with advice. Everybody from your third grade teacher to Aunt Jolene is going to have some lessons and advice about money for you. You may even receive some books about money and financial planning for graduation gifts.
Take it all in and formulate your own money plan. Learn from others, take it all in, the failures and successes, and create your own financial plan. Be adaptable, things may not go as planned, and you may have to adjust your plan.
By now, many of you have worked part time jobs throughout high school. Some of you have probably even purchased your first car. And then paid for your first car repairs. Some of you have paid for a big purchase or a big trip. My daughter even paid her way to Europe a few summers ago.
So you may have some ideas on how to handle money, how to budget, save and how to balance a checking account. These are tasks that you have to do the rest of your life, so get used to doing it on a consistent basis.
You already know that saving is a must!
Save as much money as possible for your school related expenses. Try to pay for your books in cash instead of using your student loan funds. Debt does not have to be normal and you can choose a lower costing college. It is okay! Ever ask a nurse or a doctor where they went to college? Probably not.
Is there a shorter path to working in your dream job? Don’t be afraid to explore that. Instead of pursuing her 4 year degree right of the bat, my daughter opted to go to a 2 year specialty (nursing) school, obtain her associates degree and her RN license. Then once she starts working, her employer will more than likely pay for her to complete her bachelors degree and beyond.
Capital One 360 is a great option for an online bank account. You can access it anywhere and even get a debit card attached to your checking or savings account. Mom and Dad can fund it online if need be!
Do What You Love
Some of you are going on to college or a trade school and some of you are going right to work. Find your passion, do what you love. You may be working for the next 45 years, so if you love your job, you won’t mind Mondays or getting up at 5 am every morning.
And it really is okay to change your course. It may be midway through college and you may have to attend an extra semester or two, but that is okay as long as you are following your passion. I know so many people who pursued a certain degree, worked in that field for 10-15 years and then went back to school because they realized their passion.
Don’t forget to make a life instead of just making money. This is so important!
You Need a Budget!
Yes, you need a budget too! Start budgeting from your first paycheck. There are many budgeting programs and apps out there. Don’t forget, you are in control of your money and you tell your money what to do. I highly recommend YNAB, You Need A Budget. It is super easy to use and you decide where every penny of your paycheck goes.
Make sure to check out my budgeting series starting here to read all of the steps in setting up your first budget.
You need to have a savings plan from day one. Get in that habit of putting part of your paycheck away as soon as you get it. You know that old saying, pay yourself first? Well, in 10 years you will be thankful if you start that habit right now.
Don’t stop at your savings account though, fully fund your retirement account. From day one! Does your company match any of your 401k contribution? Make sure that you at least start with that match.
When you get your first “adult” job, commit to yourself that you will put at least 10-15% of your paycheck every pay period into some type of investment account, whether that be a Roth 401k, a Roth IRA, or any type of investment account. If you make that commitment to yourself from the beginning, you will not even miss it.
Compound interest is your friend. Let me tell you a little story about saving your money. So you and your best friend get jobs at about the same time. You decide to put that part of your paycheck away right from the start, but you stop after 10 years. Your best friend doesn’t start for 10 years, but she invests the same amount until age 65. Who will have more money? Surprise, you will! That is compound interest, my friend. Don’t ever stop though. Save that money until you retire. You will never miss it and you will have financial independence.
Get used to living on less. I cannot stress that enough.
Build an emergency fund, read about how to to build it in 90 days here.
Going to college? You still need to budget your money.
Many of you will be incurring your biggest debt of your life in the next few years, besides a mortgage. Yes, I am talking about student loans. Because let’s be honest here, most parents just cannot afford to foot the bill anymore. Be smart about the amount of money you borrow. Keep it to a minimum and DO NOT take that refund! It really is not a refund, it is the part of your student loan that is not needed for tuition, room and board, or other school related expenses.
It is okay to work a part time job while in college! In fact, it may be beneficial to your time management skills, you will not have so much time on your hands and you will HAVE to study during your downtime. Not only will it help your time management skills, you will have some spending money and you can start paying the interest on any loans that you have to take out.
This may be hard to hear for some, but you do not have to complete your bachelor’s degree in 4 years. I know! But….no buts…do it on your terms. You want to work your way through college and pay cash, more power to you. Take 8 years to finish your degree, that is okay, as long as you are still following your dream.
Stick with your budget. Yes, that take out pizza or Chinese food on Saturday night while studying sounds great, but is it in your budget?
Buy used books and make sure to sell them back at the end of each semester, unless you need them for future reference. Renting textbooks is an option as well. Amazon even has textbooks now!
Click below for a free trial of Amazon Prime:
Goals and Dreams
What do you want to be doing in 20 years? 40 years? Make sure to set yourself goals, both short term and long term. Start a journal. Keep track of your goals and your dreams. If you write your goals down consistently, they will seem more tangible. Break them down into mini-goals, so you have some small wins on the way to the big wins. Dreams are important. Do not give them up. No one can take them away from you. It might take you 20 years to reach your dream destination or job, but do not give up! Create a vision board in your room. Picture yourself there. You will get there faster if you work towards your goals and dreams every day. Tell yourself every single day what your dreams are, what you want to accomplish it. Vision them.
Books I recommend
I highly recommend reading a few books by these financial experts.
The Richest Man in Babylon – by George S Clason – This should be required reading for every single high school graduate! It will teach you lessons about hard work, financial wisdom, compound interest and so much more. It is a book like no other, in my opinion, in that it reads more like a story than a book about financial advice.
The Millionaire Next Door – by Thomas J Stanley – seven common traits that show up consistently in those who have accumulated wealth. A great read for anyone, no matter your age or financial position.
Why Didn’t They Teach Me This in School – by Cary Siegel – 99 personal money management principles to live by. Financial basics that should be taught in school!
Love your life, not theirs – by Rachel Cruz – seven essential money habits and how to stop comparing yourself to others
The Graduate Survival guide: 5 mistakes you cannot afford to make in college – by Anthony O’Neal – not necessarily financial advice, but life advice
I encourage you to read these books before you start working full time. You need to have a plan for your money from day one. Do not let your money plan your life. Too many of us have been a slave to the lender for too long, and would love to see this new generation blaze their own financial path, on their own terms. Good luck in your future endeavors. Take it all in, enjoy every day, take the time to look around, be a friend, volunteer. The world is yours to discover and conquer.