Whether you plan to go to college, take a gap year, or go straight into the workforce, all high schoolers should know how to handle and manage their money. High school is a great place to start learning how to be financially intelligent. It is important for high schoolers to know the basic information about opening bank accounts, setting goals and budgets, and understanding the differences between needs and wants.
Understand & Open a Bank Account
High school is a great time to learn about and open up a bank account if it has not already been done. It is important to understand the difference between a checking account and a savings account. These are the most common types of bank accounts, especially for a high school/college student. A savings account is exactly what it sounds like. It is used to put money away for long periods of time without many withdrawals. A checking account is more so used for the constant movement of money in and out. There is more available access with a checking account. When deciding which account would work better for you, think about what you will be spending money on. It is also important to keep in mind what your goals are for your money and savings. If you plan on saving up for something with a bigger price tag down the road and don’t want to be tempted to spend that money now, you should look into opening a savings account. If you will be making daily/weekly/monthly payments or deposits, you will most likely benefit from a checking account. To open an account, go to the bank of your choice and let the bankers know what you would like to do with your money. They are sure to help you out!
Set Goals & Budgets
It is helpful to make goals for saving money. These goals can be short-term or long-term. Setting a goal will help with motivation and provide a finish line. Creating a budget might sound daunting, but it is a simple process. Start by figuring out how much money you make in a given month. Then make a list of all of the necessary payments you have to pay in a month. Take your monthly earnings and subtract all of your necessary payments from it. If you don’t have any money left, or don’t even have enough money for all of those payments, you will need to reconfigure your costs. There may be somethings that you need to stop spending money on in order to prioritize the important payments. It is important to be specific when listing what the money is going towards and how much money it is. As a high schooler, you may not have many payments, so save as much money as you can. If you are able to pay and save comfortably, you can set aside a certain amount for fun expenses each month. Check out this article for an in-depth checklist of how to create and follow a budget: Creating a Budget.
Differences Between Needs & Wants
When using a budget and sticking to it, it is important to understand the difference between a need and a want. When being financially intelligent, it is important to not spend too much money on items or events that aren’t necessary. Some examples of a “need” would be grocery shopping, filling your car with gas, or paying rent. Some examples of a “want” are buying the newest iPhone, taking a fancy vacation, or going shopping. Sometimes these expenses are okay – it is perfectly fine to reward yourself for working hard! Getting something special every once in a while, if you can afford it, is great. It is important that you are prioritizing the necessary payments before the unnecessary ones. Creating a budget is going to help with this. When making a budget, you will see what payments are vital every month, and then you can set aside money for special occasions.
Understanding basic financing doesn’t always come easy. It can take a while to get used to adopting new habits, following a set budget, and holding back from excessive purchases. It can also take a few trial runs to figure out the best saving methods and budgeting for you! This will be different for everyone, so take time to find out what works best for you. Hopefully, this article helped you understand bank accounts, goals & budgets, and needs vs. wants. This information is going to help any high schooler save money for current payments or future ones. Whether the plan is college, work, or another path, this information is vital!