Financial Literacy for Students

It's never too early to start learning about financial literacy! High school is a great opportunity for students to expand their knowledge about this fundamental life skill. Financial literacy for students covers topics such as savings, credit, planning for college, and investing.

For high school students, it's important to have a broad set of financial literacy skills to use, so we've outlined four tips for students looking to brush up on their personal finance knowledge. 

4 Tips to Help You Understand Financial Literacy for Students

1. Invest for the Future

Investing is a great way to build your wealth and prepare for your future. Investing for the future is a smart move because the earlier you start, the better off you’ll be in the years to come. 

There are different investing strategies for teens that can be used. Custodian accounts are a solid option for minors looking to get into the investing world. Custodian accounts allow parents to manage and maintain the funds for their children. There are many different custodial accounts that you can choose from. Since each account type is different, you'll need to do your research on which one best fits your needs. 

You may also find that you want to start investing for your future which can help put you ahead of the game. You can invest towards goals such as homeownership, retirement, or college. These future investments can dictate how much you can afford on a house and it can help you get ready for college. Investing for your general future can help alleviate any stress as you navigate different life stages.

2. Control Your Debt

Students should have a deep understanding of how debt works and the best practices for using it. 

In simple terms, debt is the total amount of money you have borrowed. This could be through a personal loan, school loan, credit card, etc. Credit refers to the amount of money you can possibly borrow. 

As you approach early adulthood, debt may be unavoidable. To take control of your debt, start by making it a priority to pay on time. Take advantage of automatic payments or create your own reminder system to ensure that you're on time each month. 

Another way to stay in control is to always pay more than the minimum amount. By doing so, you’ll speed up the repayment process, and it may even increase your credit score. 

It's important to remember that credit isn’t something that should be taken lightly. It's a powerful tool that can be extremely helpful, but it can also significantly impact your financial future and even your mental health. Those who are dealing with debt can face mental health issues such as depression or anxiety. 

In fact, a survey by Mckinsey & Company found that the respondents reporting with mental illness were 66% more likely to report debt as well. Struggling with these two problems can feel very isolating and scary, which is why seeking help should be encouraged to those who need it! 

Debt problems can also impact your future by limiting your financial options. For example, if you have bad credit history it may work against you when applying for potential jobs or personal loans. Since credit plays such a huge role in personal finances, it's very important that you handle debt responsibly. 

3. Ask For Help When You Need It

As mentioned before, finances and mental health often overlap. With so much that goes into personal finances, it can be beneficial to have a good understanding of the resources available to you. 

There are different types of financial professionals who can help you get on track with your money matters. Financial coaches are individuals who can help you fine-tune your money management skills and build better financial habits. You can work side by side with them to achieve your goals. 

There are even professionals for more specific issues such as debt or investing. Debt coaches are available to help you come up with a plan on how to pay back any borrowed money you have. 

On the other hand, investment advisors can help you grow your funds and invest wisely. There are plenty of benefits for working with financial advisors that you can take advantage of throughout your adult years. Remember that finances can be tricky to manage, but you don't have to do it on your own. 

4. Understand Identity Theft

Protecting your finances is crucial for a successful future. Identity theft is when thieves steal your personal information and use it for their gain. Some examples of where thieves can get information are credit or debit cards, bank statements, and even medical records. It can be extremely difficult to repair what has been stolen, making identity theft no laughing matter. 

Identity theft is a serious problem that has caused a lot of Americans harm over the years.  According to a Javelin study, nearly 42 million Americans were victims of identity theft in 2021, and unfortunately, some of those victims were students just like you.

Since identity theft is a prevalent problem across the country, high school students should have a general understanding of how to protect themselves. There are different ways that thieves can get your financial information. 

One is what is known as ‘dumpster diving.’ Even in the digital age, there are still paper financial records that can be stolen. To avoid this, take extra precautions with your records. Make sure financial papers are either shredded or disposed of properly to guarantee that they don’t end up in the wrong hands. 

Another way that thieves can obtain your information is through what is known as phishing. Phishing is a scam that uses what look like real companies to get you to enter your personal information. Phishing frequently takes place through email, so make sure you're aware of the most common phishing scams.  

Identity theft is a real problem facing Americans. Make it a priority to ensure that you're protecting your personal information and staying vigilant with your finances. 

Final Thoughts on Financial Literacy for Students

Financial literacy is a crucial life skill that students need to be well educated on. Knowing how to prepare for your financial future will help you to avoid any common roadblocks in adulthood. 
Managing finances can be difficult, but there are plenty of ways to stay on track. For example, if you need help figuring out how to pay for college, did you know you can work with a college counseling to find scholarships, learn how to apply for financial aid, and so much more? Sign up to work with one of UPchieve’s free college counselors and take the guesswork out of paying for college!