Everything I Wish I Had Learned About Money In High School

I would love to meet the person who got a practical financial education from their high school, or find an American institution of learning that is teaching people how to balance a budget, or pay bills on time, or even just use a savings account. It would bring me great joy, as I have currently never met a single person in my life who got their basic financial knowledge from school, and feel pretty convinced that forcing everyone to take calculus, while not teaching them what a credit score is, seems to be the foundation of math departments everywhere.

And it’s sad, because if there is one class that would have been of great use to teenage Chelsea, it would have been How Not To Ruin Your Credit Score Within The First Year Of Legal Adulthood. I definitely didn’t gain anything from the geometry summer class I had to take in order to graduate, which mostly consisted of watching a guy in a Staind t-shirt build a rubber band ball. If I could have just learned a few simple, practical things — not even an entire class, let alone subject! — it would have been enormously helpful. These 7 lessons would have stayed with me for life.

1. Those student loans are real.

Looking back, few things are scarier than realizing that high school seniors are given the capacity to sign away their financial future, encouraged by deceptive college pamphlets that promise amazing job prospects and a four-year-long party. Add to that the stigma that community colleges unfairly hold, and the natural desire to go do something fun and exciting with all of your peers in an exciting new place, and it’s hard to imagine an 18-year-old who wouldn’t sign up for 100,000 worth of debt for their studies.

But if someone in their high school was teaching them exactly what paying that money looks like on an average salary, and how much money a month it will take away from things like rent and “going out,” they might think twice before taking the most fun-looking option, instead of the best deal. They might not find themselves at 22 jobless, drowning in debt, and fearing that the only real fun of their lives is already behind them.

2. Always have a budget.

Why do no high school classes involve making a budget out of several different income and lifestyle combinations? Why is making a budget — regardless of financial situation — not something that all students learn how to do? Even people we think of as “rich” have budgets, and theirs are likely quite detailed and conservative, as accumulating wealth stems more from what we save than what we earn (but more on that later). Going into the working world not knowing how to manage your money, and make the most of it, seems to set you up for failure.

3. Credit matters. Big time.

Any high school that isn’t giving its students at least a week of courses on the basics of credit, how to build a score, and the mistakes that will ruin it, is not doing its job. At 18, students have the capacity to make or break their financial reputation, and not preparing them with a firm understanding of the credit system is a crime. When I was 18, I was handed a 500-dollar limit credit card and basically told to “have fun!” by my bank.

Maybe if someone had taught me the damage ruined credit can do, I wouldn’t have immediately maxed that card out and put off paying it for years.

4. Money doesn’t just magically save itself.

I mean, technically, if you don’t spend a certain amount of money, it will remain “saved.” But first of all, that basically never happens, and second of all, even if you are good at saving, finding the best use of the money you save is a whole other endeavor. Knowing the basics of things like savings accounts, CDs, 401ks, and the like would be a great start. And when it comes to taking a percent of our earnings out every month, learning to “pay ourselves first” — to always make sure the savings are automatically debited and transferred to an out-of-sight account — would be a huge step up from how most of us enter the employed world.

5. Women are not exempt from financial literacy.

Maybe your high school was different, but mine tended to breeze through Home Ec (lol) and Health classes without a single mention of financial planning for women. We never learned the basic tenants of financial independence, even though we rarely learn about these things at home. Even just a brief talk on how motherhood could affect our careers and finances, or how we are now expected to be breadwinners in addition to mothers, would have been a huge help. From the limited education we got about our future lives as women, you would think that it was still 1950, and our only concern was not gaining too much weight after childbirth.

6. Protect yourself. Invest in yourself.

Teaching the basics of investment and real estate should be a requirement in school, and so should the world of insurance, in all its various forms. Students should learn equally about investing in our own futures, as well as protecting what we have, and not making every financial decision a total gamble. (The amount of students I knew who forewent insurance to spend money on things they didn’t need, or put their meager savings in terrible places, is pretty shocking.) Being able to make smart, thoughtful decisions that are not immediately gratifying is a huge advantage to a teenager, and will help prevent them against their own instincts to do whatever is fastest, easiest, and puts the most money in their pocket that minute.

7. Wealth isn’t what you earn, but what you save.

Ultimately, earning a lot of money is great, but meaningless if you are not able to control and adapt what you are spending. We all know people who, despite earning a good salary, have managed to get themselves into serious financial trouble or staggering credit card debt because their cushy income allowed them to think that every purchase would be fine in the long run.

No matter how much you earn, you will not accrue true wealth (or have the feeling of security and comfort that we often associate with wealth) until you live well below your means, and make intelligent decisions with your savings. Students naturally aspire to flashy, high-income jobs which they believe will solve all of their problems, but earning a million dollars in a year will not prevent you from going broke. I wish someone had told me that chasing “success” is only going to leave me unhappy and with bigger spending habits. Chasing “balance” is what will truly leave you feeling wealthy and independent, even if it doesn’t make you feel like you’re in a music video.

Image via Ella Ceron