Money management is an important skill. Unfortunately, some young people only receive money management advice after they’ve made a few serious mistakes – if at all. Here are five tips for high schoolers and other young people to help them get a head start on their financial freedom and long-term goals.
Open A Bank Account
As simple as it may sound, high schoolers should understand the basics of banking. Understanding which kinds of savings and checking accounts are the right fit, or charge outrageous fees, is important when opening a bank account. Young people should research the different types of accounts offered by banks in their area before taking the initial plunge.
Build Your Credit Score
Building good credit can open several doors for young people. Understanding which factors affect a credit score, such as credit age, credit utilization, failing to pay bills, and more is a key factor in raising their credit score and getting the best rates for financing a car, home, or personal loan.
Understand Student Loan Options
In order to avoid regretting how much debt they acquire from student loans, high school students should explore their financial options. While maxing out on their student loans may make university life more comfortable, dealing with six-figure student loan debt can be a nightmare. High schoolers should assess what they want to go to school for and see if that career path is lucrative enough to pay back their education debt.
Realize The Risks Of Renting
While most young people love freedom, they should be briefed on the risks of finding their own place. Establishing renter’s insurance, finding a roommate you can trust, and understanding the lease are huge factors that can affect a young person’s renting success. Eviction notices are real, and they can mess up a credit score big-time.
Set Up An Emergency Fund
Establishing an emergency fund is an essential part of being an adult. High schoolers should calculate their living expenses and start saving until their fund reaches a minimum of three months of expenses. This way, if they suddenly lose their job or something else unexpected happens, they will have the emergency cash to fall back on until they are on their feet again.