First Steps: Financial Planning in Your Teen Years

I received a wonderful question from Jane, a sixteen year old female, who writes:

Last week we had a “consumer education” week at school and our school brought in some financial people to talk to us during homeroom. This made me think about money so I started searching Google and I found your site. What I should I do right now to make my future easier and safer? I am sixteen years old and a sophomore.

Jane, I am deeply impressed that you would even be asking these kinds of questions at your age. When I was in high school, such issues were pretty far from my mind.

At your age, your focus should be on getting things in place so that you can have a strong and flexible career. Right now, you’re probably not earning much income and, honestly, I wouldn’t worry too much about that at this point in time.

You should spend the rest of your high school years preparing for what you’ll do immediately after graduation. This might seem a long way off right now, but the more preparation you start right now, the better off you’ll be.

The first thing I would do is take challenging classes in school. One of the things that will hit you like a freight train in college is the difficulty of classes, particularly after your first year. Taking difficult classes now prepares you in two ways: one, you learn information now that you would have to learn later, and two, you learn strong study skills. The ability to absorb information quickly and be able to use that information quickly is perhaps the most vital skill you can learn in life at this point.

If you ever wonder how a high school class will ever help you in the real world, here’s the answer: the skills you build and master in the process of learning are what you’re really learning in those classes. You’re not necessarily learning that particular subject – you’re learning the skills needed to actually absorb that information and demonstrate that you were able to absorb it. Study skills and time management are the keys.

Don’t worry if you don’t know what career you want to follow at this point. Your first year in college will mostly be full of general education requirements anyway, so you have plenty of time. Your best bet is to simply start figuring out what you enjoy and what you don’t and building a strong and well-rounded base of knowledge, along with study skills. They will serve you well for the rest of your life.

The next thing I would do is be selective about extracurriculars, but pour yourself into the good ones. Look for extracurricular activities that are tied to learning new things and give you opportunities for leadership. Don’t join fifty clubs. Instead, focus on just two or three things and get involved with those, participating in them deeply.

Another suggestion: look for friends who are headed in a positive direction in life. Who are the other people at school who are obviously striving to get ahead and are doing many of the same things that you are? Those are the people to befriend, because you’ll form a friendship that pushes you both to new heights. Outside of that group, don’t worry about what other people think.

If you have access to people in your life that are successful, talk to them about it. Ask questions. You’ll find that most successful people are flattered by the type of questions you’d ask and they’ll be happy to help you and answer almost anything you might ask of them.

What about money, then? Your first big interaction with money will come in the form of student loans when you go to college (assuming that you do). When you’re choosing a school, try to choose the school that gets you a solid education for a reasonable price. Don’t choose the most expensive one, even if it seems incredible, unless you have a way to pay for it that doesn’t involve significant loans or debt. Putting in a lot of work for scholarships during your junior and senior years of high school is worth it because they’ll directly reduce your student loans.

Similarly, avoid credit cards like the plague when you get to college. No matter how tempting the easy money is, you’ll end up paying back a lot more than you use. Just avoid them.

If you want or need a job in college, seek out any and all opportunities for employment related to your major. If you can get a job related to your major on campus, you are going to have a huge leg up. Don’t sweat it if your job is all about washing lab equipment or sorting papers or scanning documents. Sure, it’s grunt work, but so are other jobs and this grunt work helps you to start establishing relationships in your field. See if your university offers a work-study program that can get you in such a job, then, while you’re working, do everything you can to do whatever your job is as well as you can.

You should also continue that extracurricular plan – focus on a small number, but try to do great things within that small handful. You should also try to build as many friendships as you can within your field of study because those people are likely to become your peers later on.

The best situation you can be in seven years is to have a degree in hand with minimal debt and a lot of extra experiences from college for your resume along with some professional contacts. If you have those, you are going to be in fantastic shape for what’s to come in your life.

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