When I look back at my time in college, I often wonder how there was no mandatory personal finance class—a sort of Personal Finances 101. Had I known how to manage money, I wouldn’t have ended up with a $5000 Nordstrom credit card debt at the age of 25.
I’m not the only one who feels this way. In a recent Money article, Sean Williams laments the fact that he never learned “the many facets of financial management” in college. “America’s kids are woefully unprepared for the real world when they graduate with respect to their financial knowledge,” he writes. He goes on to list six things that he wished he had learned in school. Since I feel the same way, here they are:
- How to balance a budget. “Students in school should be taught early and often about the basics of keeping a record of their financial transactions. This means recording cash flow into and out of a checking account, and understanding how to properly formulate a budget,” Williams says.
- How to manage credit. Everyone should understand a credit score, as it’s an important component to a financial institution deciding if it will give you a loan.
- How to invest for retirement. Students need to learn that investing in the future is a valuable and crucial process.
- How taxes affect us. When I got my first paycheck, I was shocked and confused by how much was taken away due to taxes. Why don’t they teach us this in school?
- How to market yourself and interview for a job. Kids should learn the basic skills for getting a job in school—things like how to prepare a resume, apply for a job, successfully interview, sell their strengths in person, and negotiate contracts and salaries. “Without these basic tools, millennials and Generation Z could wind up being underpaid and/or underemployed,” Williams points out.
- How to set goals. If one of your life goals is to own a house by age 35, you’re going to have to set financial limits so you can achieve that goal. As Williams put it, “most goals will ultimately tie back into your finances. You need to be able to save enough in order to take a trip to Europe, buy a beach house, or start a family.”
Keep your cash in a stylish, roomy wallet.
How did you learn to manage your personal finances?