Personal Finance for High School Students #Finance

this is what you need to know about money and personal Finance before graduating from high school hello and welcome to practical personal

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance where you get the information you need to understand and succeed with money today i’m going over five personal

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance topics that you should be familiar with before walking across that stage and receiving your high school diploma money can be a pretty complex topic so as always i’m going to do my best to break it down for

you and explain each of these five topics in simple terms let’s get started with topic number one Budgeting if you listen to podcasts or watch a lot of youtube CashNews.cos there’s a good chance you’ve come across the dave ramsey show and maybe you’ve even

heard a Debt-free scream if you’re not familiar dave ramsey is a radio personality from tennessee who’s famous for providing financial advice to people of all ages who call in to ask him questions about money live on the air on his daily radio show there’s usually

a part where an audience member tells dave the story of how he or she paid off all of their Debts most of the time it’s some combination of student Loans Credit cards and car Loans then dave asks this question what’s

the secret to getting out of Debt nine times out of ten the response is Budgeting if there’s one thing you take away from watching this CashNews.co it’s the importance of creating a budget because if you understand how to create a budget and you take

the time to do so on a regular basis there is no doubt in my mind that you will become successful with money Budgeting is the process of laying out a plan for your money before it comes in or goes out you’re predicting how much Income you’re going to

have in a particular time period usually a month and then you’re deciding how you’re going to use that Income the reason so many people struggle with money is that they don’t take the time to make a plan for their money they don’t pay attention to how much

they’re spending and then they end up spending more money than they have coming in it’s easy to see how this creates a problem there are no shortage of Budgeting apps out there but i find the easiest way to create a budget is with a spreadsheet at the beginning of each

month i spend 30 minutes to an hour calculating how much money i expect to have coming in and then laying down a plan for how i’m going to do my spending i give every dollar an assignment before it even hits my bank account this allows me to easily make decisions about my spending if

it’s not something i planned in advance to spend my money on it’s not something i spend my money on if you want to see the details of how i create a budget i made a CashNews.co where i go in depth and take you through the entire process and if you’re a college student i made a

more specific CashNews.co tailored to the Income sources you might have while you’re in college links to both are down below topic number two is Insurance let’s say you’re walking down a set of stairs at home on a rainy day you slip and fall and

wind up with a broken ankle you’ll need to go to the emergency room get some x-rays done have surgery to ensure it heals up properly get a special boot for walking and attend physical therapy twice a week for three months all that medical treatment is not going to be cheap thankfully if

you’ve got health Insurance that’ll pay for the majority of it on a basic level Insurance is something you pay a relatively small amount of money for on a monthly basis in this example maybe it’s a few hundred dollars per month for health

Insurance then if something unexpected and expensive happens you’re only responsible for a small portion of the bill in the case of a broken ankle that requires surgery this could be the difference between it costing you one thousand dollars and thirty thousand dollars most

people don’t have tens of thousands of dollars just lying around so they choose to pay a few hundred a month for a health Insurance plan that way if something comes up they’re not financially ruined if you’re in high school chances are you’ve already got

health Insurance and maybe even car Insurance through your parents so while your Insurance needs should be taken care of for the time being they’ll become your responsibility as you move on into adulthood it will become important to have a

good understanding of the types of Insurance available and how they work if you’re interested i made a CashNews.co about the five different types of Insurance you’ll probably need to purchase before you’re 30 years old and i also made a

CashNews.co where i go in depth into every aspect of car Insurance and give you my recommendations for how much coverage you need links to both of those CashNews.cos are down below topic number three is interest think about the process of renting a car you walk into enterprise pay

a rental fee and you get to take one of their vehicles for a few days when your rental period is up you bring the car back interest is like a rental fee but instead of borrowing a car you’re borrowing money anytime you borrow money to buy something be it a student Loan to pay

for your college tuition a car Loan to buy a new mustang or even a swipe of the old Credit card to buy a chicken sandwich of popeyes you’re going to be stuck paying interest the amount of interest you’re going to be stuck paying depends on two factors

the amount of money you borrowed but haven’t paid back and the interest rate the more money you have left to pay back and the higher the interest rate you have on the Loan the more interest you’re going to pay so if you want to avoid paying a ton of interest fees you

want to limit the amount you borrow and make sure you get a low interest rate when you do i spent my entire college career not paying attention to how much i was borrowing and what the Interest Rates were on my student Loans later on i ended up having to pay nearly

ten thousand dollars per year in interest fees alone not counting the amount of student Loans i had to repay when you’re in Debt like i was interest really sucks but when you’re investing interest will become your best friend the other aspect of

interest you need to know about is called compounding let’s say you put 100 into an investment that pays you ten percent interest per year ten percent of one hundred dollars is ten dollars so after a year you have one hundred and ten dollars in that investment ten percent of one hundred and

ten dollars is eleven dollars so after year two you have one hundred and twenty one dollars in that investment the reason you earned eleven dollars in year two instead of ten dollars like you did in year one is because of the extra money in the investment that you earned in year one that extra

dollar in year two is interest on the interest you earned in year one also known as compound interest compound interest is one of the most powerful Wealth Building tools available to you and understanding how it works is a major key to becoming wealthy if you’d like to learn

more about interest i made CashNews.cos where i explore the topics of interest on student Loans and how compound interest is calculated links to both of those are down below topic number four is Taxes imagine ordering a pizza and having it delivered you pay the

price on the menu and tip the delivery driver when he shows up at your door you get inside and open up the pizza box only to find that two of the eight slices are missing what gives well if your paycheck was like a pizza those missing slices would be Taxes and if there’s one

thing you can be sure about it’s that whenever you get some pizza there’s going to be some slices missing because uncle sam is hungry two of the most important things to know about Taxes are how progressive taxation works and how to file your annual tax returns

progressive taxation is a fancy term for tax brackets the more you earn the higher the percentage of your Income you need to pay the government in Taxes on the surface it’s a pretty simple concept but there’s a major misconception about how tax brackets

actually work let’s again pretend that pizza is Income when you get a single pizza you’re in a one slice tax bracket and it shows up with one missing slice when you get two pizzas now you’re in a two-slice tax bracket so how many slices would be missing in total

most people mistakenly believe that each of those two pizzas will be missing two slices for a total of four slices missing but this is incorrect the first pizza will only be missing one slice while the second pizza will be missing two slices for a total of three slices missing this is in essence

how progressive taxation works filing your annual tax returns on your own is like a rite of passage when you become an adult and if you’re doing it for the first time it can be a daunting task here’s an overview of how it works when your Taxes are getting taken out of

your paycheck all throughout the year what you’re really doing is paying the government an estimate of the amount of Taxes you actually owe until the year is over there’s no way to know for sure what your exact tax bill will be that’s where tax returns come into

play after the year is over you’re taking a look back adding up all of your Income and calculating your Taxes owed then you compare the amount of Taxes owed with the amount of Taxes you already paid if you paid more than you

owed you get a tax refund if you paid too little you need to pony up some cash the tax return documents themselves are like worksheets that help you do all of the calculations and there’s no shortage of apps and tax professionals who will fill out and submit those worksheets for you if

you’d like to dive deeper into the topic of Taxes i made in-depth CashNews.cos about how tax brackets work and how to file your tax return for the first time links to both of those CashNews.cos are down below and finally topic number five is Credit scores

what if your best friend asked you to borrow some money to buy a new CashNews.co game and promise to pay you back in a couple of weeks if you had it would you lend him the money sure why not you trust him you see him just about every day and if he tries to stiff you you know where he lives and you

can get his parents involved but what if a random stranger came up to you on the street and asked you for the same favor would you do it of course not and yet banks lend out huge amounts of money for houses and cars every single day how can they tell whether or not that person is going to pay them

back easy their Credit score your Credit score is an easy way for banks to quickly determine how reliable you are as a borrower if you have a good Credit score it means you always repay the money you borrowed on time and in full with interest banks

love lending money to people with good Credit scores because that’s how they earn money and build fancy skyscrapers downtown it’s all those interest fees we pay them every month on the flip side if you have a bad Credit score it’s generally an

indication that you aren’t a very reliable person when it comes to repaying your Debts banks don’t like lending money to people with low Credit scores because odds are they’re going to have to chase them around a little bit to get their money back

and there’s a possibility they might not get their money back at all if that person vanishes or declares bankruptcy your Credit score can range from 300 on the low end to 850 on the high end don’t ask me why that’s the range it just is your score is based on your

Credit report which is a record of all your accounts monthly payments and amounts you owe on Loans and Credit cards this record is maintained by three independent agencies called Credit bureaus when a bank gets your

Credit score your record is fed into a computer system that does some analysis and spits out a score just like how a scantron form was fed into the machine and spit out a score for tests back when i was in high school are they still using those things anyway if you want to learn

more about Credit scores i recommend watching either my CashNews.co about Credit scores in general or my CashNews.co about how to achieve a Credit score of 800 or higher both of those links are down below what else do you think a high school

student needs to know about money and personal Finance let me know in the comments if you enjoyed this CashNews.co click right here to watch my CashNews.co about how to set

financial goals and why it’s so important to do so and if you’d like to show your support for my channel click right here to subscribe as always thanks for watching i’m andrew scheer and i’ll see you next time