Whenever I talk to my friends, I’m almost astounded when I hear stories of the mistakes that they made in their late teens or early twenties and I find it hard to believe that they graduated from high school without knowing this stuff (I would have been clueless too, but I freakishly was interested in financial stuff from an early age and used to read books about it in my teens). Maybe it’s the responsibility of parents, maybe it’s the responsibility of schools but perhaps parents and teachers are often just as clueless as the kids. Anyway, help is here! My hope is that if you are a parent or teacher, you’ll forward this on to the high-schooler that you know and love.
Personal Finance tips you should have learned in High School (but didn’t):
Student Loans are NOT Free Money
You will have to pay them back eventually and in most countries, they cannot be cleared through bankruptcy. It is always in your best interests to take on as little debt as possible. Compound interest can work for you if you have savings, but it can also work against you in if you have debt such as student loans, which means that the more debt you take on and the longer you take to pay it back, the more interest you will end up paying. Even if you defer your loans, you will still be racking up interest.
Take out as little in the way of student loans as possible. Work in high school to save up money, have a part-time job during university, find paid internships, get a summer job and finally and most importantly live very frugally and spend as little as possible.
Nobody Owes you Anything: it Takes more than a University Degree
These days, a university degree is no guarantee of a good job simply because there are just so many people that have them. You’ll have to bust your ass when you’re in uni, working part-time jobs related to your field of study, doing internships, networking and getting extra certifications just to get your foot it in the door in many fields. Don’t drink your life away, like many people do, but instead take your studies seriously and make the most of the opportunity given to you.
Related to this, consider your major very carefully. Look at employment prospects and outlooks. A general arts or humanities is not going to get you very far and it will be a pretty terrible situation to be a hundred thousand in debt and only making $25,000 a year or even worse, unemployed. Consider a field where there are not enough workers to fill demand.
Scholarships: Don’t be Lazy
I hear stories all the time of places who offers scholarships to university students, but they have no applications because they are only offering $200 or something like that. When you are finishing high school, you should be applying to any and all opportunities out there, no matter how small. If you spend 20 minutes applying for something and ended up getting the $200, it would have been well worth your time. Think about applying for scholarships as a part-time job of some sort and devote 10 hours a week- it will pay off.
Consider a Trade instead of University
Related closely to the previous one, if you have any sort of mechanical aptitude, consider a trade. These are often very highly paid jobs and most tradespeople never find themselves out of work, ever. But, be careful to avoid some of the service industry jobs that are hard on your body, but have very low pay.
Take a Year Off
Parents often make it seem like a terrible thing to take a year off after high school, but it really isn’t if you have no idea what you want to do. It’s far better to figure that out while you’re not spending thousands of dollars paying tuition. Find a full-time job of some kind and save up a bit of money. Explore options. Go to school part-time at night. Talk to people in industries that you are interested in. Volunteer. Seek out an unpaid internship. There are plenty of options that don’t involve going to school full-time.
That said, if you do know what you want to do: go for it and make it happen!
Surround yourself with Good People
Find some people who are going places, the ones with some motivation and passion and desire to make themselves and their lives better. There’s a saying that you are basically only as good or bad as the 5 people you spend the most time with. I think it’s 100% true and if you spend your time with people who have nothing going on besides figuring out where the next party is, you probably will just drift along with them and graduate from university with terrible grades, no relevant experience and no valuable connections.
Want Something? Save up for it
These days, companies hand out credit like candy and you’ll run across plenty of kiosks on campus inviting you to sign up for a credit card. Most of these cards have astoundingly high interest rates-up to 20%, so avoid them like the plague. Car dealerships, home furnishing stores and electronic stores offer the same kind of thing. Avoid them as well and instead use the novel idea of saving up for something. Want to buy a car? Work and put money away until you can pay cash for it. Want to get a new TV? Do you have enough cash? Buy it. If not, well, sorry…keep working until you do. Similar to student loans, remember that there is no such thing as free money. You’ll have to pay it back and that car or TV will end up costing you far more than the sticker price.