You learn the basics like saving money and working hard to make money when you are a kid. As you grow, you need to learn specific things about money management. It is always better to understand how to gain control over your money, so you do not end up falling into debt.
Money management is not as easy as you think and hence it is suggested that you learn it in the early years of your adult life. You start earning money from a part-time job. You must know how to stay on top of your expenses.
Apart from regular expenses, you may come up with a financial emergency. With the help of money management techniques, you will likely avoid relying on fast cash loans the same day in Ireland.
Money lessons that you must know as a high school student
Here are the money lessons that you must know if you do not want to face financial problems down the line:
- It is never too early to save
When you start doing a part-time job, you do not bother about setting aside money for a rainy day. You think that it is too early to do so. If you try to put in some money, you do not bother to save for long term goals. You think that it is too early to save money.
For instance, you will not prefer stashing away for retirement as you are too young. Well, when it comes to money management, it is never too early to stash away money.
Of course, it will not be possible to save for different targets from your part-time income, but you should not completely stop setting aside money for a rainy day.
Even if you get a chance to put aside €1, you should. If you stick to your saving habit, you will not find any problems down the line while saving for big financial goals.
- A car is not a good investment.
If you want to buy a car, you should first evaluate the pros and cons. First off, you need to understand that it is not a good investment as it is a depreciating asset. As soon as you bring a car out of the showroom, its value decreases by 30%.
It is simply a waste of money, especially if you can manage without it. It can be a suitable option when you are to commute to your college or work daily. Further, if you are paying for it outright, it is better. This is because the interest-bearing loan will put a lot of burden on your finances.
If you are looking for loans for bad credit car finance in Ireland to buy a car, you need to be more careful. These loans can be expensive because of poor credit ratings. Make sure that you do not have any problems repaying your debt. Experts suggest that you buy a used car as you can conveniently manage to pay off your debt.
- It is crucial to build an emergency cushion.
As soon as you leave your home, you should start laying aside money for a rainy day. The emergency corpus will help you tide over during financial emergencies. This corpus will help you tide over when you lose your job or when you come up with unexpected expenditures.
Many of you find it very hard to lay aside money for a rainy day with a part-time salary. Still, instead of building a significant size of the emergency cushion, your goal should be consistently set by money. Even if you can put by only a small amount of money every month, you should try to stick to your effort.
- Financial institutions exist to make money.
As a high school student, you can think that financial institutions, including lenders, are your friends but do not forget that they are selling financial products only to make money.
You should think logically instead of believing their advertisement claims like getting money without a credit check or getting affordable loans despite a bad credit rating.
Whether you are able to repay your debt easily, you should always borrow money when you face a financial emergency. No loan has been designed to help you meet your regular expenses.
- Invest money
You let it be idle in your savings account when you save money. However, this does not make sense. It is important to understand that money loses its present value owing to inflation. If you let the money idle be in your savings account, your buying capacity will whittle down. This is why it is suggested investing money.
When you invest money, you will be able to make more money. This will help you grow your emergency cushion faster. Since you are too young, you will likely flinch from investing money. You generally do not think about investing money as you do not have knowledge about it.
You should consult an investment expert who can help you with investing money based on your investment goals and risk-bearing capacity. As you cannot invest in property now, shares, bonds and mutual funds will be good assets to buy.
- College degrees are not enough.
It is crucial to understand that college degrees are not enough to help you land a new job. You will need a lot of skills to prove your multi-tasking abilities. It is crucial to understand the current demand so you can adapt yourself to it.
Never hesitate to spend money on improving your skills. Just your college degree is not enough to make you suitable for a job role. Make sure that you know what other skills the job industry expercts, so you try to develop in yourself. You should try to get as much exposure as possible.
The bottom line
It is crucial to learn money lessons as a high school student because these lessons will help you manage money smartly in the later years of your life. The tips mentioned above will actually help you manage your money in a better way.