How Much Should High School Graduates Know About Finance?

Graduating high school is an exciting time and, for many, marks the transition into independence and adulthood. It is when many teenagers start to think about money and begin to take control of their finances. But so many enter their post-high school life with little knowledge about finances.

This article looks at eight things every high school student and graduate should know about their finances.

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1. Sticking to a Budget

Budgeting may seem like a tedious chore, but it is unfortunately vital. Creating a budget does not have to limit your spending or stop you from buying things you want; instead, think of it as a way to make sure you do not overspend and keep track of your spending habits.

Budgeting is a great way to allow you to build up savings and, over time, is likely to prevent you from going into unnecessary debt. It does not take much time, either. You can start by setting aside time once a month to think about what you can afford and what you will need to spend.

Sticking to a budget can be challenging, especially if you do not have much experience. But as you get more experience managing your own money, it gets much easier, and you will probably find budgeting becomes second nature.

2. Setting Spending Goals

Once high school students have a solid budget, you can set individual goals. Your financial goals are highly dependent on your objectives and what you want to achieve. You may set a goal amount to save for a specific item or identify an area where you want to cut back on your spending—read more here.

Whatever your aims are, setting smaller goals can help to break down your finances into more manageable chunks, making it much less intimidating. If you are starting by earning or spending more than you are used to, short-term goals are essential to help you get to grips with money and help you to prioritize spending.

3. Creating a Solid Financial Plan


When you start to earn money or are given the freedom to manage your finances, it can be tempting to focus on the present and put off thinking about the future. But planning for the future is one of the most essential and advantageous things you can do for yourself.

It might seem pointless to start saving for things that are way in the future, like buying a house or even retirement, but it’s never too early to start. If you are earning enough to put away a little each month, you will soon see your savings building up and will be better placed to protect yourself in the future.

4. Getting to Grips with Interest

Learning how interest works can help you better understand your finances and make your savings work harder. Learning about interest can help you learn how to earn extra on your savings and make them work for you without doing anything.

It can also help to learn that not all interest is good interest; the dangers of high-interest rates can cause financial problems that can be difficult to get out of. So, consider putting in a bit of effort to avoid high-interest rates and make sure you are using interest to your advantage.

5. Thinking About Insurance

Insurance might not be something you have had to worry about before, but you will need to be adequately insured after you graduate. Ensure you shop around and find the best insurance for you and your finances and consider the different types you are likely to need. Try thinking about renters’ insurance, car insurance, and health insurance.

Another possibility is that your parents will keep you on their insurance. There may be some benefits for them if they do, and it can help you save money, even if it is only temporary. Consider asking your parents if this is something they would think about while you work to sort out your finances and ensure you can fund your own.

6. Paying for College

This is likely something you have been thinking about for a while, but now is an excellent time to start if you haven’t considered college yet.

College can be costly, so ensuring you are on top of your finances is a great start. Thinking about how much you expect to spend and how you can cover these expenses will put you on the path to keeping your experience affordable and may help ease some of the pressure that college can bring.

If college is not for you, investigate other opportunities to learn and further your career. It can help to take advantage of mentors and counseling opportunities available to you through school or career advisors, which can help you explore your options and consider how you might finance them.

7. Creating an Emergency Fund


An emergency fund is a set amount of money you can fall back on; you must have some money to turn to in emergencies. An emergency might be anything from college to car repairs. How you use your emergency fund is up to you. The important thing is that you have one there when you need it.

Consider setting up a fund with a separate bank from your usual one. This way, you will not see it every time you log in and be tempted to spend it. The most important thing about an emergency fund is that you don’t spend it unnecessarily.

8. Beginning to Build credit

It is essential to begin building credit as early as possible to establish a good credit history. Good credit is important because it shows that you can manage your money well and makes you look better when you apply for things in the future.

One way to begin building your credit is with a credit card, but it is essential to consider this carefully because it is easy to fall behind on payments and build up debt. Also, a credit card is only the right option if you know you can keep up with repayments. Another method of building credit is by repaying car loans or rent on time.


Learning how to manage finances is vital for ensuring you can keep on top of your money and have the know-how to make it work for you. The transition period between high school and college is a great time to ensure your money knowledge is up-to-date and complete.