Have you ever heard anyone say, "I wish I knew what I know now back then"?  In high school and growing up, personal finances including money, budgeting, and investing don't have a large part in our learning curriculum.  Even in college as a finance major, many areas are not taught in the classroom.  Some students may go through an economics course or two but there isn't much that teaches "life" finances.  These simple lessons that could be taught in one class, would drastically change students lives once they are thrown out into the world.  Here are a few essentials I wish were taught in high school to prepare students.

1) Budgeting

Budgeting is a very important skill, yet you'll usually never hear anything about it in school.  It's especially important to students entering the workforce for the first time starting off at a lower salary.  You have to know how to make your money go further for you.  This may include knowing how to plan for and pay bills like rent, utilities, insurance, car payments and making sure there's enough left for groceries, savings, and investments.  You don't have to track every penny you spend, but it's always a good idea to have a general plan for a budget.  If you're income is less than your budget, there's something wrong and you need to figure out how to decrease your spending. 

2) How Credit Cards and Interest Work

Many 18 year olds apply to get their own credit card as soon as possible.  So therefore it makes sense to teach our students how to a credit card works.  Many people run into the issue of running up a large balance that they can't catch up on, especially once their interest kicks in.  Large credit card balances also play a tole on your credit score.  At the very least, students should understand that you have to pay back every dollar you charge, credit card interest accrues daily when you carry a balance, and your interest rate can play a huge role in your monthly bill if you aren't paying off your charges completely.  Lastly, students should understand it's not a good idea to buy things they can't afford with a credit card.  

3)  Power of Compound Interest

Young people are at a disadvantage in that they may not be at their fullest income potential yet, but they are at the advantage of having time on their side.  They can take advantage of the full potential by opening an investment account that earns interest.  Even small amounts of money can pay huge dividends in the years to come by what's called compound interest.  This is sometimes known as making your money work for you.  Interest earns on top of interest and soon enough you are starring at a number far larger than what you invested in the first place.  Students need to know how to take advantage of this.  

4) How to Build Credit

Your credit score can severely impact your financial health, for better or for worse.  It all starts when you're young and the decisions you make have a lasting effect and are hard to compensate for down the road.  Students would be better off if they knew what types of things affect their score and some basics on how to start building credit like opening a credit card and paying it off religiously every month. 

5) Investing and Stock Market Basics

There are many adults that are not sure about investing in the stock market, let alone someone who is fresh out of high school or college.  We don't need to overload them with details but give a few basic building blocks to start with and understand.  It would be a shame for young people to miss out on building wealth with the stock market, especially since you don't need to invest a lot if you start early.

6) Balancing a Checkbook

This is something that has started to go away with the invention of online banking but still has an important place, even if it's just done mentally now.  Students need to know how to manage their cash flow and outflow to avoid getting upside down.  Too many people spend money using a debit card or credit card and find out at the end of the month that they went overboard and now have an overdraft fee.  Also, with credit cards and debit cards, checks are becoming a thing of the past as well.  Many young people are unaware of how to properly write out a check to someone.  This is something that should be taught to everyone.  

7) Starting a Business

Now this one may not be for everyone and some students just don't have an interest in it during their life.  But, for some students who have that business mindset, giving them the tools early to be an entrepreneur could be life changing for them.  Teaching them how to start a business from scratch in the classroom, will help them tremendously once they graduate.  

The End Result

When people don't know better, they don't do better.  Let's try and make a positive difference in our students' financial futures now by teaching them every day finance basics.