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Money Management in High School

 

By Shreya Deo


Money management is something that every student should know. As we get into high school, we start to unlock new methods of making money. More job opportunities are offered, our allowance might increase, or we might begin a start-up. But with all of these amazing things comes additional expenses that we never needed to worry about as a kid. Going out with friends' costs money, driving tests cost money, and just about anything that comes with a reward also has its expenses. So how can you make money management a smooth ride throughout high school? Today's article will focus on just that.

The importance of financial literacy

As a 10th grader, I do not know much when it comes to finances. The topic often bores me, and just about every kid thinks that finances is a topic for adults. And you aren't completely wrong. Majority of finances are managed by our parents before we head off for college. House rent, bills, groceries, entertainment, and emergency savings don't really matter to us right now. But still, knowing the basics of how finances work is essential to being successful and hassle-free heading into college. 

Financial literacy is nothing but the ability to understand matters of finance. I myself have never been interested in the depths of finance or its terms, but knowing it proves to put you above others. First off, knowing the importance of budgeting will give you a huge advantage over your peers in college when you have to manage your own finances. While your peers will be out spending their money on food and other unnecessary purchases, you will be able to save some money for bigger occasions in the future. 

Budgeting

As mentioned in the last paragraph, budgeting is an extremely important and easy method for managing your earnings. The first rule of budgeting says that you should be spending less than your income. This means keeping some in a savings account, possibly, for future use or emergency situations. 

The 50-30-20 rule is a very good way for managing your money. The rule simply states that you should save 50 percent of your income towards needs, 30 percent towards wants, and 20 percent towards savings. Of course, you can always save more if you feel the need to, but this basic template for budgeting is what many people swear by when it comes to money management.

Finding a constant steady source of income

Finding a steady source of income is beneficial when we talk about the main idea of money management. It's quite obvious, right? If you don't have a source of earning money, how will you manage it? Now, a steady source of income doesn't necessarily mean a 9 to 5 job, not at all. If you have a flexible job schedule, that is great too! But you have to make sure that wherever you earn your money, it is guaranteed. For example, an acting gig might not be a steady source of income (although, it's a tough job!) because sometimes, your shows might be houseful, other times, it might not attract a large crowd at all. Thats why, you should find something you know will give you a definite amount of money every month, irrespective of any external factors. This also ensures that your budget stays intact.

Avoid going into debt when avoidable

Debt is something nobody wants to deal with walking out of college. It remains a constant headache for many, even years after college. Often, in the first few years of a new job, people are getting to use a small amount of what they are earning, just because they are having to pay off so much debt. Instead of waiting for the end of college to re-pay your debt, paying a bit off at set intervals will help you maintain a good, consistent cycle of earn and pay off.

Conclusion

From no angle am I a highly experienced financial literacy student, nor do I have any interest in it. But knowing the basics of managing your money early on will save you a lot of time, money, and stress. Knowing the right methods for managing your money and the right time to start educating yourself on financial literacy will make life a lot smoother for you in the long run! I hope you took something away from today's article, and make sure to follow every Friday for new tips!

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