Despite all their technical expertise, today’s young people may not be as financially savvy as their ancestors were. Whether this is the result of technology making money easier to access, the lack of financial training from busy parents, or the seductive pull of advertising in today’s highly technological society, top students may or may not have much training when it comes to financial matters.
To counter this trend, it’s important to help your students learn principles of sound financial management and get ahead of the curve. By learning these principles when they are young, your teens will be better prepared to handle the larger expenses and obligations that they will face as they go out on their own into the world. Here are some top financial tips for today’s students to learn well:
Learn How to Create and Follow a Budget
A budget is a roadmap leading to success in achieving your financial goals. Don’t make it too detailed or you will avoid looking at it. Having a loose budget and sticking to it as closely as possible will help you keep your expenses lower than your income so you have room for savings and emergencies.
Avoid Debt and Get Out of It Fast
Not getting into any debt at all is an ideal that our depression ancestors learned well. In today’s high tech society, it can be easier said than done. Getting through college without any debt can be a huge hurdle, especially if you didn’t have sufficient savings when you started. Try to keep any debt as low as possible and never take on more than you can reasonably pay with a part time student income. Ideally your debt should be kept to student loans and nothing else. This will save you a lot of pain and hassle in the long run.
Pay Your Bills as Soon as Possible
It’s very easy to forget about a bill if you don’t have a good system to keep track of when everything is due. Make a plan to pay all your bills right as they arrive in your inbox or mailbox, or set up a system where everything is automatically withdrawn from one of those prepaid cards for students. Always pay a few days early and keep a minimum amount of money in your account that is sufficient to cover the upcoming week’s bills. By being on time and following the rules, your credit score will soar and you will be ready for larger financial obligations such as a car or a home.
Open a Savings Account
Use your savings account to set aside 10% of your income, no matter how much you get on your paycheck. Learn to live on 90% of your income, and you will always have a backup for emergencies. Make yourself rules about what you can use that money for, so it will always be ready when you need it most, instead of being wasted on large items that you don’t really need.
Get Good Advice from the Older Population
Grandma and Grandpa probably know something about being frugal after years of financial mishaps and successes. You may be able to teach them about Facebook, but they can teach you something about money. Ask your elders how they managed money when they were in school, and get tips from them on saving money. They know a lot more than you think, and can help you avoid costly mistakes that you could make because of inexperience.