Jan 17
Two Financially Smart Things They Don’t Teach You in School
For the past forty years or so, college has become increasingly expected of high school graduates. This particular path often delays learning certain skill sets for some. It’s often the case when you’re still tied to your parent’s bank account. As always, I know not all college students have this luxury. Some are learning finances while attending school. But a good many students are either completely or partially linked financially to their parents.
Finances Matter
I share this story as a reminder to all parents that these are skills people don’t automatically know when they turn 18. Help a kid out. Teach them.
Expense Tracking
As my four 2021 high school grads move forward in their efforts to save money and move to pursue their own goals, they’ve learned to track their spending. No, they aren’t all mine. See this story for the origins of the group.
Each one sits with me monthly and we get out an old-fashioned Excel spreadsheet. All four of them are currently employed with their first jobs. Prior to this, any money that was in their accounts was given to them by parents or a birthday gift. Basically, they didn’t bother to keep track of it.
Interesting how you spend your money becomes a bigger deal to you when you’re earning it yourself.
Each one of them has their own temptation when it comes to spending. One loves to eat out, another loves clothes, one likes video games, and finally one spends on his car. But now that they’ve started tracking their expenses, they’ve become much more aware of when to put the brakes on.
Each time we sit down, I tell them, it’s their money to spend as they choose. I just want to make sure they realize how they’re choosing.
It works. In addition to tracking their spending, they give themselves a budget for the coming month. A target to hit or not exceed. Four months ago, they wouldn’t have done this and now they rarely go over their allotted spending. Additionally, all of them are hitting their savings mark each month.
I get that an Excel spreadsheet is a Grandma thing to use, but I wanted something basic for them to see. They’re transferring to apps linked to their accounts this month.
Taxes
It’s that time of year.
We have an entire session scheduled so they can learn how to file taxes on their own. They have no idea about paying income taxes.
And before you judge them too harshly, why would they? Just like tracking expenses, we only pay attention to things when they’re necessary.
You may be reading this article and think these kids have silver spoons in their mouths. But, not true. These are kids who come from working class backgrounds. Yes, they are privileged that they haven’t had to worry about these financial aspects of life, but they’re hardly alone.
The Takeaway
Don’t assume the young adults know how. Think of all the financial trouble people get into because they simply didn’t know. If you know how, teach them.
And as always,
“Be the person you needed when you were younger.”
~ Ayesha Siddiqi
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