Considering the story behind the name of this blog, it should not surprise you to learn I love cheesy jokes.
Dad jokes, bad puns, jokes so stupid they’re funny — I’m here for it all. In a world where crude humour is increasingly the norm, cheesy jokes are refreshing.
And admit it: they can be pretty funny — especially ones that hit deep, like this one:
“I’m glad I learned about parallelograms instead of how to do taxes. It really comes in handy this parallelogram season.”
I could swap out parallelograms with any number of things I learned in grade school — how to play the recorder, the difference between a limerick and a haiku, the rules of soccer baseball. These things were useless to me then and remain useless to me now.
Meanwhile, important life skills — including those related to money management –were left largely up to me to figure out on my own.
Needless to say, the list of things I wish I had learned in school about personal finance is long.
Basic money lessons I wish I learned in high school
It’s been 10 years since I graduated from high school — and surprise, surprise, I don’t remember anything about parallelograms or the recorder or whatever.
But I have learned a few things about money! Here are five really basic elements of personal finance that I wish I learned more about before venturing out into the so-called real world.
How to make (and stick to) a budget
I got lucky: I learned how to make and follow a budget through my involvement with a student-led organization that planned and hosted conferences. Had it not been for this, I would have graduated with no idea how to go about even getting started.
Why it matters
Your budget shows you the real cost of your lifestyle. A good budget outlines all your expenses to guide you in making decisions about how to spend your cash.
Creating a budget does not need to be complicated. You can use a program, like Mint or You Need A Budget, or you can stick with a simple Excel spreadsheet. Personally, I prefer creating budgets on the computer as opposed to on paper, as it makes the adjustment process easy, but the format is less important than the content.
Not sure how to get started? Check out this post for tips on creating a budget that works for you.
Having and following a budget is the first step of effective money management.
The proper way to use a credit card
I got my first credit card at 18 years old and used it for every purchase.
Thankfully, it had a $500 limit at that time, which made paying it back fairly easy. I didn’t rack up big debt or carry balances for long, but it would have been very easy to do since at no point did I ever learn a thing about proper credit card use.
Why it matters
Reckless behaviour with a credit card comes with long-term consequences. Not only do you have to deal with the immediate impact of outrageously high interest rates, but bad credit card habits ruin your credit score — and that’s not an easy thing to fix.
How to manage debt
The average Canadian student will spend more than $20,000 to attain the education level necessary to get a job — and yet, very little time is spent ensuring high school students understand what they are signing up for when they apply for that student loan.
Why it matters
Student loans are just that — loans. Which means they will eventually need to be paid back, with interest.
Gone are the day when it was possible to pay for university on your summer earnings; considering the current state of the economy (where work after graduation is not a guarantee), the very least we can do for young people today is teach them some skills to help manage the debt they will inevitably have to deal with.
How to save money (short and long-term)
In high school, I had one savings account. Every two weeks on Thursday, a deposit would be made from my part-time job…and every Saturday, the money would be gone.
Where did it go? Clothes, usually. Sometimes it went to CDs and books, other times, nights out with friends.
It wasn’t until the tail end of Grade 11 that saving for university became a priority (and even then, it was the last one). I didn’t even know what RRSP stood for then, let alone why I should have one.
I was a pro at spending money – I didn’t know the first thing about saving it.
Why it matters
Money doesn’t save itself. Saving requires discipline — and a willingness to deny instant gratification once in a while.
Regarding long-term savings, like RRSPs, it is easy to think these don’t matter all that much when you’re young but starting early is key to making the most of them. I started my RRSP when I was just out of university and while I don’t contribute as much as I would like to, it feels good knowing I have a start on retirement savings.
I’m also a big fan of sinking funds. Introducing sinking funds to our budget has been a game-changer in terms of saving for short to medium term goals. For more information about how we use sinking funds in our budget, check out this post.
How to file your taxes
After years of my father-in-law doing our income tax, I decided to try doing it on my own this year.
What a process!
Although navigating the forms was fairly simple, there were some things we simply weren’t prepared for – like needing to consult previous returns for information.
With a little assistance from the father-in-law, we were able to finish our taxes and received a nice little return. But the whole process would have been smoother with a better understanding of what, exactly, we were doing.
Why it matters
Income tax is part of adult life. It’s not something you can avoid (well, you can. But it’s not recommended). While there are certainly some circumstances that merit professional attention, there is a benefit to knowing how to file a basic return on your own.
Final Thoughts
It is entirely possible things have changed since I was in high school 10 years ago. There is certainly more conversation around the importance of teaching financial literacy and I think that’s great! The more knowing and skills young people have regarding personal finance, the better equipped they will be to manage their money in the future – and isn’t preparing the next generation for the future what school is all about?
What money lessons do you wish you had learned in high school?
I would have never thought about teaching my kiddo about taxes. Well not at least until she had gotten a job and was required to learn, but there is no reason for her to not be involved in our tax process. Thanks for that one!
Even just having a handle on the basics, in my opinion, would be helpful! I know when I finally started doing my taxes myself, I felt really overwhelmed…but I really didn’t need to be! Of course, I have found our tax situation has gotten more complex over time, but having those few years of learning while they were simple has made me feel more confident. Can only imagine how much more confident I would be now if I had more exposure when I was younger!