10 Things About Money That Should Have Been Taught in High School

High School is supposed to prepare you for a bigger, brighter, more fulfilling future. It’s a final boss of ‘mandatory’ education. A place where lots of people spend their final days of learning, never to crack a book again. Somehow this place doesn’t prepare Americans for their financial future.

There are problems with our education system, and with High School. I believe the neglect in teaching basic financial education may be the largest. It’s a colossal issue that affects most people. This article discusses what all people should know about finances, these are lessons that many individuals must learn the hard way. Learning these things can speed up retirement, allow people to save lots of money, stay out of life altering debt, and help them not get scammed by organizations whose only goal is to make money off them.

The financial decisions that people make from the graduation of High School until their mid-20’s can be the most important decisions of their lives. This is when many people start to stack up debt and bills and it’s when people lock themselves into a single career.

1. You don’t need college or the debt that comes with it to have success

If you’re going to college to get a good job or to make good money, it’s important to know that college is not necessary for either of these things. There are many jobs that can make you lots of money with no college necessary. Some examples include plumbing, real estate, welding, and coding. Those all can pay 6 figures or more. 

I’m not trying to imply that college is useless, but if money is the only goal and you have to take out lots of debt to go to college, it may not be the first place you want to try. Maybe a trade school or jumping straight into work can set you up for a brighter future. This goes especially to people (like me) who do not know what they want to go to college for when they graduate High School. Going to college and taking on debt when you don’t have a degree, you’re aiming for can be a massive financial mistake.

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College debt. Go talk to college grads, do some online searching, or watch YouTube videos on the topic. Many people who get their college degrees wish they didn’t because of the debt. Going 20, 40, or 100 thousand dollars in debt for a degree that will help you attain a job that pays somewhere near 45k. Most students don’t understand that they are spending a lot of their future money on a degree that makes a much lower salary than they realized.

If you factor in paying off your debt, your income is thousands of dollars less and that debt may last 20-30 years before it’s paid off. If you add in cars, a house, and credit cards it’s easy to see how people quickly spend more than they make every year digging themselves into a pit of debt, diving further down Dante’s Inferno one credit card swipe at a time.  

College debt can also trap you into jobs or situations you don’t want to be in because you must pay off debt each month for decades. You will be required by the government to pay a certain amount of money until the loan is gone. Over time this will prevent individuals from pursuing a passion or starting their own business because they have so many bills from a decision they made when they were 18 years old and had no education on the impact of college debt.

2. Avoid credit card debt like it’s trying to destroy you because it is

I have a friend that has credit card debt because they don’t want their savings to look smaller. I literally mean that they don’t want their savings account to have less money, so instead of paying off the credit card they pay credit card interest and end up paying more than they should on their purchases to have a false belief that they have more money than they do.

Credit card debt can DESTROY people financially, it should be avoided always. You should not be buying anything ever on a credit card unless you can pay it off that day. This doesn’t mean buying something then paying it off when you get paid next. It means you don’t use the credit card unless you have the cash in your account already to pay off the card. DEBT IS NOT GOOD!

Going into credit card debt without realizing your interest rate, what interest rate means, how long it will take you to pay it off, and how much money is being wasted every month paying off the interest. All these things need to be considered before making any credit card purchase. If you’re already in credit card debt, you should probably stop using a credit card now! Credit card debt, just like student loan debt, can ruin your life making every day stressful instead of enjoyable. 

It may seem like only a few dollars every month. It may seem like not that big of a deal. The reality is that when someone is in debt, they no longer have freedom. They are now enslaved to the person who they owe. From now on that person cannot do anything they want because they have no choice but to work a certain amount of hours each week, specifically to pay back the entity they owe money. That’s no way to live.

3. Credit is ESSENTIAL

This may sound like the opposite of the last tip but it’s not. BIG MYTH about building credit. “You need to have loans or be actively paying something off to build credit.” THIS IS FALSE. I personally have nearly an 800-credit score (which is quite good) and I have NEVER had any debt or a loan in my entire life. The reason my credit builds is because I have lots of credit cards but all of them are fully paid off every month.

All my credit cards except one just sit idle in the drawer helping me build credit. Credit is built mostly through the amount of credit lines you have open (each credit card is an additional line of credit) as well as how long you have had a credit history, and how many payments you make on time. There are additional factors as well. Here is a screenshot of my account and the factors that are taken into consideration for credit score. Credit Karma is free, and it doesn’t affect your credit score when you check it. You can check your score every single day with no impact on your credit score.

You want high payment history, low credit utilization, low derogatory marks, long credit history, lots of total accounts, and low hard inquiries.

Without a good credit score much of your life can become extra expensive. For example, having a good credit score can help you have a MUCH lower interest rate on your mortgage. It can be the difference of tens of thousands of dollars of the course of the loan.

Some people think you should never use any form of credit. I believe being deliberate with purchases can make credit and credit cards tremendously beneficial. That’s a choice you must make. But, not having credit can cost you lots of money on things like mortgages.

4. Filing taxes can be hard or really easy

When you start making money filing taxes is easy if you have an employer and just the single source of income. Once you get into owning a house, having a family, a business, doing tax write-offs, donations, investing and other financial things, doing your taxes becomes very complicated.

When your taxes are simple, TurboTax is a great resource to use to file your taxes (not a sponsor). Once they become more complicated you should consult an accountant. Remember that some companies do not take taxes out of your check, so you may have to save money in order to pay off your taxes each year. Tons of athletes run into this issue where they think they can spend all of the money they are paid and by the end of the year they find out they have a six-figure tax bill and don’t have the money to pay it. The government does not appreciate this, many people have spent time in prison for failing to pay taxes.

5. The military pays quite well

I’m not sure if this was just myself and my friend group but prior to joining the military I falsely believed military personal didn’t make any money, and everyone serving was broke as hell. It turns out that many people who are in the military are very smart and are making upwards of 60,000 +. After four years of service I was making over $40,000 including benefits. That was coming from zero skills, zero college, and I was in an office job. There are careers in the military that can allow people to make 80k+.

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If you’re not sure what to go to college for, you don’t know what you want to do with your life, you want to get out of your town, or you want to serve your country. This may be a good reason to join the military. It pays well, it’s the reason I was worth over 6 figures by the time I finished my four years. A bonus is that you also get free college and many other benefits.

6. Every dollar you save at 18 is worth 10x more

If you save when you’re young you have the power of compound interest. Saving a little bit in your youth can make you a millionaire. Every year you wait could cost you 10s or hundreds of thousands of dollars. If you have a $100 bill in your pocket in 20 years, it will still be $100 bill. BUT if you invest that $100 bill, in 20 years it may be worth $500 and could be worth much more. The more time you must invest your money, the more that money can be worth. Investing when you’re young allows this investing over time to take place. Don’t wait.

Rich Dad Poor Dad, the book, covers this very well. Saving when your young, even 50 dollars per month can make a major difference in your life when you get into your 40s and older. This topic alone is worth doing lots of research on. Sacrificing 10-20 hours now while your young in the next week or two could be the difference of you being with 10 million dollars or broke when you’re an adult and retired. Many YouTube videos are made about compound interest. Some great books on investing include I Will Teach You to Be Rich , and The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.

Research ways to invest, calculate how much money you need to retire based on current spending. You can talk to a financial advisor if this is overwhelming. You may want to try multiple advisors to find one you really trust to help you succeed.

7. Don’t buy a new car, and try not to take out a loan

Buying a new car because you get a warranty or because it’s more ‘reliable’ is one of the silliest things I’ve ever heard. Out of everything in this article, this one thing can literally cost you millions in your life. There is almost no reason to ever buy a new vehicle unless you’re incredibly rich and can pay with cash. (In my opinion)

If you’re paying an extra $200 per month instead of investing that $200, over your life that cost could be nearly $500,000 over 30 years, or a million dollars from 20-60 years old. That means that if you invest the extra money instead of having a little bit nicer car, that one thing could make you worth a half million dollars more. Enough money to buy any car you want.

8. Rent and Utilities should be minimal when you’re young

Before you have a family and don’t want to live with roommates try to save on rent. This is the biggest expense for most people. Keeping this cost low can allow you to save money for investing and other things you like to do like travel, and hobbies. Some good ways to do this include having roommates, living someone with a low cost of living, or buying a property and renting it out (like a duplex or triplex). 

Cutting down on the cost of rent can be major in having financial success, and just like mentioned above, saving while your young is critical to a healthy financial life in your future years. 

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9. Don’t trust the bank

Banks are trying to make money off of you. They want you to get credit card debt, they want you to pay late fees. Look for a bank that charges the least amount of fees. Look for investment accounts that only charge fees you’re ok with paying. Don’t sign up for accounts unless you understand exactly what they are and their purpose. Banks want to make money off of YOU! Don’t let them!

I personally use Charles Schwab bank because they have no hidden fees and no minimums.

10. Budget, kinda

I’m not going to tell you to track every dollar because they suck. If you feel like you have no money to live and you’re super broke, then maybe you should track every dollar to see what is happening. Overall, saving around 20% of your income, spending around 30% on living, and 10% on food should be decent. You can play with the numbers on your own but saving at least 20% should probably be strived for. Once you decide how much money needs to be saved that should be your first expense. As soon as you are paid you should have 20% automatically taken out of your check and invested.

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My hope is that these tips can assist in solving the problem of the lack of financial education and possibly save someone a lot of hardship.

Nothing in this article is guaranteed to work, it is just my point of view and my opinions. These are the things that I use that allowed me to save lots of money and I wish I was taught this stuff in High School which would have given me a huge head start financially and allowed me to spend my time on things other than learning about finance.

Published by Christal

I’m here to share the knowledge and tips I have so you can see how I make passive income, save for an early retirement, and enjoy life outside the cubicle.

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