All high school students should have a mandatory financial planning course. They should learn everything from how to balance a checkbook , what a week’s worth of groceries cost, what the monthly electric bill costs, to the consequences of not paying their credit cards on time. A course like this also needs to cover the dangers of having too many credit cards and how the lure of credit is simply that, a way to get a person to spend more than they have and get more than they need.
Students need to learn this before they enter college because the credit card tables are everywhere. From Citibank to Discover and everyone in between, someone is trying to sell a college student the best deal ever. The problem is college students are in a rush and running in between classes, short on time and cash. It seems like a good idea to get the card, but unless the credit card is paid at the end of the month and only used for necessities, it can cause permanent damage to a person’s credit score and trust with family and friends who may be asked for a loan to cover the big bills.
This course would be an ideal time to discuss needs v wants. A student needs text books or a computer and printer. A student does not need to spend $300 on a fancy meal to impress friends or a significant other. A budget should be predetermined and before you sign on the dotted line of any card, make sure your credit limit is something you can handle as well as the APR is something you understand and is reasonable. Plan a budget for books, the computer and printer if you don’t already own one, and food. Include in this budget recreation money and transportation costs and you will begin to have a good idea of what an actual budget looks like.
For a first step into the world of credit cards, a good idea might be https://www.greendot.com which is a prepaid credit card. You can put in the money as you need it and never have to worry about overspending. This would help establish good credit and get a student off to a good start. This is now available for high school students to use and is a good beginning for parents to monitor spending habits before the student goes off into the collegiate world.