Advice for High School Graduate

[creditcardfree]

I'm sure this has been discussed many times, but what financial advice would you give a high school graduate? Any non financial advice?

[creditcardfree]

My advice to a high school graduate is to accumulate an emergency fund, preferably BEFORE graduating, but as soon as possible for anyone at any age that doesn't have one. I think $500 to a $1000 is a good start. More is always better.

[MonkeyMama]

Don't use credit to finance a lifestyle you can't afford.

I know too many people who used student loans to finance lifestyle (bigger apartment, newer car, more stuff, lots of going out). Along the same lines, no one expects you to be able to afford a $20,000 car when you are 18.

[kork13]

I would start out with:

1) Build up an emergency fund. Start with $1k, then 1 month's expenses, then 3 months, then 6 months. Don't know what your expenses are? Keep track of every penny you spend for a few months -- it can be enlightening. Which leads me to....
2) Know how much you earn, and know how much you spend every month. Make sure that the latter never exceeds the former, & save the difference every month. You want to make a point of intentionally saving. Save first, and live off of what remains.
3) Open a Roth IRA immediately (or as soon as you get a job), and max it out every year, no matter what. Invest in simple broad-market index funds, and don't worry about it.

For everything else ... Ask questions. This forum or the Bogleheads forum are both great resources. There's way more to learn, but learn from the right folks & you'll do great.

[disneysteve]

If they are a high school graduate, that would probably mean that their college choice is already set, so too late for that advice.

Still, the best financial advice would be to borrow as little as possible for college. Work summers. Work PT during school. And don't use student loans to finance their lifestyle.

Of course, I'd also make sure they knew that credit cards are strictly for paying for things you can afford to buy. The bill must be paid in full every single month. Never carry a balance.

When buying a car, buy the cheapest one that meets your needs. $5,000 is the price point that most people should be looking at at that stage of life.

Always save money. Don't allow yourself to fall into the habit of living paycheck to paycheck. No matter how much or how little you earn, part of it should always be set aside for the future.

[sv2007]

I'm sure this has been discussed many times, but what financial advice would you give a high school graduate? Any non financial advice?

attend a good college.

[FLA]

I would start out with:

1) Build up an emergency fund. Start with $1k, then 1 month's expenses, then 3 months, then 6 months. Don't know what your expenses are? Keep track of every penny you spend for a few months -- it can be enlightening. Which leads me to....
2) Know how much you earn, and know how much you spend every month. Make sure that the latter never exceeds the former, & save the difference every month. You want to make a point of intentionally saving. Save first, and live off of what remains.
3) Open a Roth IRA immediately (or as soon as you get a job), and max it out every year, no matter what. Invest in simple broad-market index funds, and don't worry about it.

For everything else ... Ask questions. This forum or the Bogleheads forum are both great resources. There's way more to learn, but learn from the right folks & you'll do great.

ITA with this. I think you have to have a job to open a Roth, though.

[scfr]

Spend your money in accordance with your values.

Appearances can be deceiving. You cannot judge someone's wealth by what you can see (clothes, car, house, watch, etc).

Money can bring out the worst in people. Do not disclose your financial worth to anyone except those you can trust completely. As a recent high school graduate, I'd say that means your parents and no one else.

[disneysteve]

Do not disclose your financial worth to anyone except those you can trust completely. As a recent high school graduate, I'd say that means your parents and no one else.

Actually, I wouldn't talk money with your parents unless they have their act together. I have known too many people over the years whose parents were a mess financially. Once the children started earning money, the parents were constantly asking for financial assistance. If that's the case, you definitely don't want to let on how much you have or how much you're earning.

[scfr]

Actually, I wouldn't talk money with your parents unless they have their act together. I have known too many people over the years whose parents were a mess financially. Once the children started earning money, the parents were constantly asking for financial assistance. If that's the case, you definitely don't want to let on how much you have or how much you're earning.

I agree . . . for older "children." I do not discuss financial details with my own mother. But I was writing as if to a new HS graduate (18 years old) whose parents probably already know their financial situaiton.

[Singuy]

I'm sure this has been discussed many times, but what financial advice would you give a high school graduate? Any non financial advice?

Is the HS graduate going to college?

If YES, then here are my 2 cents about that.

1. Major picking is very impt, but more impt is to stick to it. Every class you drop is $$$ down the toilet..every time you change out your major can cost you years of tuition and time.

2. If you have rich parents/trust funds/or can afford it, then study what you want. If you are on your own using student loan money..then pick a career path from the top 30 jobs on USranking and study up on what to major in and how to get to be in that career.

3. You get a lot of chances to make mistakes in college...that doesn't mean you should take them.

4. It's best to find your significant other in college..never again will you be surrounded by people your age....which makes dating more difficult after college.

5. Student loans are NOT free money. Try your best not to take the max amount allowed. You do NOT want to finance anything while on student loans. This means..no new cars or houses or else you'll be paying "double" interest.

6. Just because you are in pre med or are in medical school already DOES NOT make you a Dr. today! (just an example, you can sub medical school with anything)I see too many students thinking "oh I'll be making 6 figures later..I can live it up now". Life is uncertain...I know MDs who can't get a residency and ended up as a pharmacy technician as a career with 170k worth of student loans.

7. Life is super expensive in your 30s and 40s (kids, house, wife, student loans, life)..so try your best to prepare for this in your 20s or else you could be drowning in debt for a good while.

[creditcardfree]

Is the HS graduate going to college?

If YES, then here are my 2 cents about that.

1. Major picking is very impt, but more impt is to stick to it. Every class you drop is $$$ down the toilet..every time you change out your major can cost you years of tuition and time.

2. If you have rich parents/trust funds/or can afford it, then study what you want. If you are on your own using student loan money..then pick a career path from the top 30 jobs on USranking and study up on what to major in and how to get to be in that career.

3. You get a lot of chances to make mistakes in college...that doesn't mean you should take them.

4. It's best to find your significant other in college..never again will you be surrounded by people your age....which makes dating more difficult after college.

5. Student loans are NOT free money. Try your best not to take the max amount allowed. You do NOT want to finance anything while on student loans. This means..no new cars or houses or else you'll be paying "double" interest.

6. Just because you are in pre med or are in medical school already DOES NOT make you a Dr. today! (just an example, you can sub medical school with anything)I see too many students thinking "oh I'll be making 6 figures later..I can live it up now". Life is uncertain...I know MDs who can't get a residency and ended up as a pharmacy technician as a career with 170k worth of student loans.

7. Life is super expensive in your 30s and 40s (kids, house, wife, student loans, life)..so try your best to prepare for this in your 20s or else you could be drowning in debt for a good while.

My daughter is going to college, but I'm asking for general ideas. I have quite a few nieces and nephews that probably won't be going to college. Some have already graduated and are working food service jobs while they figure out what to do.

I'll let my daughter know to look for a spouse! I find that amusing, but there is truth there. Good list, thanks!

[MonkeyMama]

4. It's best to find your significant other in college..never again will you be surrounded by people your age....which makes dating more difficult after college.

True that.

I've discussed this with my kids already. How I framed it for my kids: Date the people you work with. When I was 15-22 most my friends did not work. Working, I met people with bigger financial goals and who were more responsible, etc. When I look back it's kind of "well duh" that my dh and I met and were so compatible. So I've discussed that with my kids already. I'd frame it as: don't overlook the sea of compatibility that you come across in your teens and 20s. & if you want to meet other responsible/mature people, do responsible/mature things. (It's just the clarity we have when we look back. I certainly wasn't working so that I could meet my life partner. I was only focused on school, myself. But you know, don't be blind to what is right in front of you).

Caveat: working and dating can be messy and I will address that with my kids too. Not to be completely overlooked. Thinking more to minimum wage jobs in a big city with infinite other jobs. The more specialized/important the job the more I'd probably put dating on the back burner. (I haven't dated anyone I worked with since my minimum wage type job at 18).

[bennkar]

4. It's best to find your significant other in college..never again will you be surrounded by people your age....which makes dating more difficult after college.

Oh so true. I ended up marrying with someone not compatible a few years after college. I finally divorced, and then ended up reconnecting with a girlfriend from college. We fit together so much better (she says the same). Of course I blame her for the disconnect all those years ago, as I wrote to her after graduation and she never wrote back so I moved on. I still get her to cringe whenever I bring it up.

[TexasHusker]

True that.

I've discussed this with my kids already. How I framed it for my kids: Date the people you work with. When I was 15-22 most my friends did not work. Working, I met people with bigger financial goals and who were more responsible, etc. When I look back it's kind of "well duh" that my dh and I met and were so compatible. So I've discussed that with my kids already. I'd frame it as: don't overlook the sea of compatibility that you come across in your teens and 20s. & if you want to meet other responsible/mature people, do responsible/mature things. (It's just the clarity we have when we look back. I certainly wasn't working so that I could meet my life partner. I was only focused on school, myself. But you know, don't be blind to what is right in front of you).

Caveat: working and dating can be messy and I will address that with my kids too. Not to be completely overlooked. Thinking more to minimum wage jobs in a big city with infinite other jobs. The more specialized/important the job the more I'd probably put dating on the back burner. (I haven't dated anyone I worked with since my minimum wage type job at 18).

The femi-nazi movement cringes at the thought of a woman marrying a man while in college or shortly thereafter. Their mantra is "have your career...you don't need a man...you can settle down later." What they don't tell you is this dirty little secret: Women in their late twenties are considerably less likely to get married AT ALL, and once a woman reaches her 30s, chances become very slim of her EVER marrying.

Why ? Because a woman's "sexual market value" to men peaks at about age 22. A man's SMV doesn't peak until mid 30s, and even after that, it only steadily declines through his mid 60s!

For women, the SMV steadily declines until around age 26, and then it drops off dramatically.

Why? Because men's and women's values in the opposite sex are radically different. Men value an energetic, hard body. Women value stability and security ($$$). A man with $$$ can get a woman half his age. And the 30 something fame is quite content with her elder hubby since he can provide the security she needs. So...he isn't interested in a 30 something.

Sorry feminist movement - it's just the way the sexes are wired.