Dollars and Sense: Six Money Senses Every High School Grad Should Have

So you've made it through high school, looking forward to graduation and starting the college or university of your dreams. Right? Congratulations!  You've made it this far. But wait a minute; there are a few things you need to know before you go any further. Maybe your mom and dad have already told you, maybe they have not, or maybe you've forgotten. In any event, here you go...

1. Track your spending.

Start a spending plan otherwise known as a budget. This is the foundation for all financial goals and future successes in life and career. Keeping a budget is an excellent way to manage your finances and achieve financial success. Especially when money is tight. A budget will help you stay on top of what’s coming in, where it is going, pay off debts faster, save a little more and let your money stretch a little further; because you will know your total net income and expenses and plan your spending around that. Habits die hard—good or bad—so why not make them. Here is a very simple plan I teach. Get a binder with a few sheets of lined paper, 12 envelopes and/or those plastic paper protectors. Put all your pay stubs and receipts in one envelope each month. At the end of each month carve out about an hour of your time to track your spending, do the math, set new financial goals and make adjustments where necessary. The aim is to consistently keep your income higher than your expenses. If you find that your expenses are higher, keep on limiting your spending until you get it under control. Try it for a month or two and I promise, you will not regret it.

HOW IT WORKS: Starting right now, draw 3 lines down the full length of the page making 3 columns. Label the top of each column as follows: write CATEGORIES: above the first column; AMOUNTS: on the second. TOTALS: on the last.

Begin by listing all your sources of INCOME and their amounts and then tally them up. (Income can come from parents, siblings, odd work paid for, scholarships, grants, gifts, etc). Convert monthly amounts as follows: Divide any onetime lump sum payments by 12, or multiply weekly payments by 4.33 and by bi-weekly payments by 2.167. Below the incomes, write EXPENSES:  and begin to list all your expenses: cell phone bill; cable and internet; rent, if you have any; car loan payment, if you have one; loan/credit-card payment; transportation costs (transit, taxi, gas and oil); lunch money; dine outs and entertainments, keeps - if you have to contribute to the household expenses; life insurance; hair and makeup; Mani Pedi; etc; for the month. Now total those up. Only put what applies to you. Below the expenses write NET WORTH: minus your total expenses from your total income.  That amount is your net worth. If you have money left over, great! Pay yourself in savings a reasonably and sustainably amount; say 10-20% of the balance. Put aside another 20% for student loan repayment or tuition. The rest is yours to splurge. This is called "taking care of business first", a simple and stress free formula.

2. Get a life insurance plan.

At 18 years old you are no longer covered by your parent's insurance. God forbid, something fatal should happen to you, you want to take the burden of off your parents to come up with funeral costs in order to give you a proper burial. You are not too young to die; therefore, you are not too young to start thinking about your mortality. The last thing you should want is for your parents to ask for donations from friends and family to bury you. (A “good turnout” in the case of a traditional burial can start at around $5,000 but can quite easily amount to a cost of $15,000.). Think responsibly. Don't spend all your money on material things and die burdening your parents. You would expect your parents to at least have funeral coverage for themselves if and when they die, so do them the favor too. Be certain to factor this amount into your budget. Here is a little secret, the younger you are, the less your life insurance will cost. Especially if you don't smoke, or drink, or have any communicable diseases. Get it now before it's too late. It's the responsible thing to do.

3. Invest in your future.

Have a meeting with your financial advisor and look at all the possible options that your money could work for you. After mulling it over with your parents and advisor, go with your gut—what feels right for you. There are ways to incorporate your savings, investment, and life insurance into one monthly payment to maximize your dollars.

4. Avoid trends like the plague.

You don't have to have the latest, clothes, shoes, style, toys and/or gadget. Know what's important to you and set goals to achieve them. Break the cycle of poorness and financial hardship in your family. Don't waste your money on material things, extravagant spending, or trying to keep up with the Jones'. You don't have to be everywhere and in everything. Trust me, it doesn't matter until it matters.

5. Protect your credit.

Your credit is and will be your most invaluable asset in your life! When you start your post-secondary classes, creditors will be pushing credit cards on you. If you must, take only one and use it wisely. It is to build your credit, not destroy it. Make sure it doesn't have little or no annual fees or hidden payments. Note: It is NOT a free for all. Trust me, I learned that the hard way. If you don't have the cash to pay for your purchases or at least know where it is coming from, you can't afford to credit it. See it and wish it well! Use your credit card to build your credit, not destroy it. Soon you will need a house and a car, if your credit is not good, you will have to settle for less. Only buy things on your credit card that you know for sure you can pay for in one or two payments. Pay it before the due date to avoid interest charges and late fees, which could inevitably ruin your credit. Did you know most companies WILL do a credit check before they hire you? Just recently, a client of mine lost out on a very good job because of poor credit rating. Ludicrous eh?

6. Be smart with cell phones.

You cannot afford to let your cell phone burn a hole in your pocket. Too often, young people and old alike allow cell phones to bring them to financial ruin by spoiling their credit. So your service provider is ripping you off; you decide not to pay; they report you to the credit bureau. That's a seven-year life sentence to financial ruin. Get the best plan you can afford and cap your spending. Enough said. My cell phone bill is capped at one hundred dollars per month on a $50 plan, unlimited international texting, unlimited local calls, incoming and outgoing, with a data plan that won't break the bank. If I come close to that $100, I get a warning text message from my service provider and if I go over, my phone line is automatically suspended until it is brought below that amount. Worst case scenario, go on a pay as you go plan. Use WIFI whenever possible. Everybody gives free WIFI nowadays as an incentive to buy from their business.

Good luck and keep up the good work. Now is the time to start planning and building for your future...not when you are thirty with kids. Remember, it is your dollars, so use your senses wisely.  Your future depends on it! I know the common trend nowadays is to “learn from your own mistakes”, but someone one also said, a picture is worth a thousand words. So I hope I have painted a pretty picture for you.  If you can manage these senses, your financial goal is closer than you think! Be blessed!

Older and wiser voices can help you to find the right path, if you are only willing to listen. ~ Jimmy Buffett

Until next time,
Be blessed, be bold, be strong, be you!
-Aggiestrong
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Andrene Gregory is a life coach with certification in LifeSkills training and Personality Dimensions. She helps empower adults to live a strength-based life, regain their confidence and find the courage to get through life's challenging situations. Her unique approach to getting desired results includes personality assessment, self-knowledge, goal setting, and action planning.

Andrene provides one-on-one coaching and group workshops. Find out more at www.aggiestrongulc.com.