An open letter to high school students about money

Dear High School student,

Congratulations on making it this far! High school is quite a challenging time in your life. Between relationships, studying, friendships, parents, afterschool activities, weekend plans and always wanting to sleep, you’re in for a rough road ahead. But I assure you, as bad as it may seem at times, you will make it through. It won’t always be pleasant but it will pass. I promise.

But we’re not really here to talk about all that stuff today. No, today we’re going to talk about how to prepare yourself for the financial realities of…life after high school. Whether that’s college, employment, or something else, you’re going to not only need money but you’re going to need to learn how to manage it. What better time to learn those skills than when you’re living rent and expense free in your parents’ house?  (And trust me, this is all practical stuff. No algebra, random historical facts or memorizing elements. Those typically only come in handy for game shows and illegal activities).

So let’s get started. Here’s a few ways to prepare for your impending adulthood:

1. Learn to budget. If you have a part-time job or receive an allowance, you have money. That means you need to learn how to spend it properly. To do that, create a budget. It’s probably going to be a small, uncomplicated budget because your parent or guardian is most likely covering all of your necessities like shelter payments, food, and clothing. So, think about how you like to spend your money and allot what you earn into those categories, even if your categories are apps, going to the movies, fast food after school. Practice only spending the money you’ve budgeted in each category each month. Believe me, the sooner you practice this, the easier it’ll be to live on a budget when you are an adult (and you’ll be able to avoid massive amounts of debt). And if your parents won’t teach you, use Google. I know you’re computer savvy. Put it to good use.
2. Create a savings account. Having a savings account is a huge part of learning how to manage your money. Putting money away for a rainy day or travel or a big purchase is a great way of avoiding debt (and believe me when I say you don’t want to go into debt. While getting into debt can be a crapload of fun, getting out of debt is horrendous. It’s probably one of the least fun activities ever).  You can start small, by saving birthday money or parts of your allowance and then work up to putting away money from a job. Talk to your parent or guardian about opening a savings account; if they say no, use the piggy bank you got when you were 5. Just find a way to start saving.
3. Deal with a car. Most teenagers dream of owning a car, especially if you live in the suburbs or a rural area with little to no public transportation available. However, most teenagers are not fortunate enough to have their parents buy a car outright. And, even if your parents cover the car payment, they might want you to pay for gas, insurance, and routine maintenance. That gets expensive. You are definitely going to need an income stream to foot the bill for this stuff (and work those expenses into your budget) but, if you are going to want a car as an adult, this is a great time to learn about all the responsibilities that come with owning one.  It might make you change your mind, or encourage you to downgrade your expectations.  (If you don’t have a car or won’t be getting a car, this is a great time to become proficient in arranging alternative types of transportation).
4. Get a job. There is absolutely nothing wrong with having a job in high school. It will teach you so many skills: independence, time management, organization, a work ethic, dealing with a boss and coworkers, and, finally, how to earn and manage a paycheck. The sooner you learn these skills, the sooner they become habit and the easier transition you have when you have a full-time job. Additionally, building a work history at a young age is a good thing that looks impressive to prospective employers and also, you can open a retirement fund and a savings account. That’s taking a huge step towards adulthood and demonstrating that you can be a responsible adult with your money.
5. Be careful with borrowing and lending. Money is a tricky thing, especially when it comes to friends and family. There might come a point where you’re earning a good amount of money and you’ve become such an expert saver that people are coming to you asking for money. Think really, really hard before you say yes.  And if you do say yes, and you don’t get the money back, consider it a lesson in who you can and can’t trust. Also, don’t throw your money around just to make people like you. Because honestly, it’s not you they like. It’s those pretty little green pieces of paper you have in your wallet (and we can talk about credit cards another day). And remember that if you borrow money, pay it back. Don’t be the person your friends and family can’t trust.

Please don’t misunderstand. You can still have a good time with your money. That’s why you have a budget. To make sure that you are putting money away for a car or college (and yes, you can take out loans for those. We’ll talk about those when we talk about credit cards) but still being able to enjoy being a teenager. Because really, it’s all about balance. Learning to balance your necessities with your fun on the income you have is pretty much the key to managing your money. The earlier you learn this, the better off you’ll be.

I know this seems like just one more thing to worry about. But this is the real life stuff. You’re going to want to take the time to learn it.

Seriously.

Love,

Jana