Finance lessons that should be taught in high school.
Tags: Financial Planning, Money, Education, Children, Finance

Photo by Kelly Sikkema on Unsplash

1> How credit cards and interest rates work

Normally, people can get credit cards at 18 and many of them see it as an unlimited source of money. Far too many young people run up huge credit card balances early when they don’t have a good understanding of how credit works. If high school students are taught a few lessons on credit cards and interest rates, many students could potentially be saved from a lifetime of financial stress.Credit can be a useful tool when you’re paying it back every month. However, interest on credit can work against you when you carry a heavy balance. We don’t need to teach them the overly complex concepts. We just need to make sure the students need to understand the following:

you have to pay back every dollar you charge

credit card interest is charged daily when you carry a balance

only buy what you can afford to pay off

interest rate can become a large part of your monthly bill if you aren’t paying your charges completely off each month

2> Balancing checkbooks

Even though the majority of bills are no longer paid by checks, it is still very useful to learn how to balance a checkback. It’s a good lesson in understanding how to manage cashflows and expenses. This should also be extended on how to learning how to pay bills online so they do nt fall in the trap of recurring charges. Though we don’t write checks as much as before it’s very important to learn how to fill out check.

3> Budgetting

Most children are in a privileged position where they don’t have to worry about bills. As a result most children don’t learn how to maintain a budget. Normally they don’t have to till their in college or even after when the bank of mum and dad stop their line of credit. It’s very important children learn how to live within their means, on the income they earn. They need to know about all the expenses in life which they may not have considered such as insurance, rent and savings, etc.

4> Building credit

Your credit score is an important part of your overall financial health, and it can make a huge difference in how you manage your finances as an adult. One bad mistake made multiple times can affect ones financial well being for the rest of their life. With good credit on your side, it’s a lot easier to buy a house or qualify for an apartment. With bad credit (or no credit), on the other hand, most of life’s biggest milestones can be harder to reach. Your credit score is greatly affected by your longest line of credit. It’s important to start building a line of credit from as early as possible.

5> Investing and markets

The importance of investing some of your income is incredibly undervalued by most people. Most-fully fledged adults don’t really understand about the stock market or investing in general. There is no need to over-explain the stock market to students but just enough to give them the basic principles behind the stock market. They need to learn the potential of the stock market how investing even $20 a month can a huge positive financial change on a persons life. Young people have time on their side so it would be a shame to miss out on building wealth with stocks, especially since you don’t need to invest a lot of money if you start early enough. It’s also important they learn how to invest safely and not get taken advantage of by scammers