Budgeting 8 Basic Financial Skills You Should've Learned in High School It's never too late to master these money-management concepts. By Miriam Caldwell Miriam Caldwell Miriam Caldwell has been writing about budgeting and personal finance basics since 2005. She teaches writing as an online instructor with Brigham Young University-Idaho, and is also a teacher for public school students in Cary, North Carolina. learn about our editorial policies Updated on January 13, 2022 Reviewed by Margaret James Reviewed by Margaret James Twitter Peggy James is an expert in accounting, corporate finance, and personal finance. She is a certified public accountant who owns her own accounting firm, where she serves small businesses, nonprofits, solopreneurs, freelancers, and individuals. learn about our financial review board In This Article View All In This Article 1. Balancing a Checkbook 2. Setting up a Budget 3. Paying for College 4. Life Skills 5. Investing 6. Long-Term Financial Planning 7. How to Build Credit and Manage Credit Cards 8. Renting an Apartment and Paying for Utilities Frequently Asked Questions (FAQs) Photo: Image Source/Getty Images If you're a college student or even an adult who feels as though your high-school financial education fell short, you're not alone. While there have been recent efforts to teach basic financial skills to high-school students before they graduate, a 2019 survey by Everfi revealed that 65% of the over 30,000 students surveyed had left high school without taking a single personal finance course. To make matters worse, many parents don't talk to their children about finances, often because they either lack basic financial knowledge themselves or are embarrassed by their current financial situation. There are eight money-management skills that every high-school student should have learned before graduating; if you haven't mastered them, take the time to do so now, to set yourself up for future financial success. 1. Balancing a Checkbook When you balance a checkbook, you ensure that the balance in your checkbook register matches the balance in the monthly statement from your bank. To do so, you'll need to keep track of withdrawals and deposits and reconcile each entry in the register with the same transaction in your bank statement. The task may seem old-fashioned with the financial software and online tools available today, but it's a must-have basic financial skill. Here's why: You can't simply rely on the balance the ATM gives you or what shows up on your bank's online portal; they do not always show the most up-to-date amount in your account since your current and available balance may be different. While balancing a checkbook is an important money-management skill for high-school students to pick up, it's all the more crucial for adults to keep a running tally of their transactions to manage their more complicated finances. Worth noting: You should match your checkbook register balance with your statement balance each month. 2. Setting up a Budget A budget is a plan for how to spend your money that factors in your income and expenses, and it's the key to succeeding financially. If you don't know how much you can safely spend and save each month, you can easily go into debt or fail to meet long-term savings goals like retirement. Every student should learn how to set up a realistic budget and plan for the future to be successful later in life. Whether you use the envelope system whereby you separate all your cash for the month into separate envelopes, the zero-based budget that leaves no money at the end of the month, or a financial app such as You Need a Budget, budgeting is a key money-management skill that everyone should master to live within their means. 3. Paying for College Many students assume that the only way to pay for college is by using student loans. But there are other funding options available that don't require repayment, including grants, scholarships (available even for those don't get perfect grades), and work-study options. Learning how to pay for college without racking up massive amounts of student loan debt should be a required money-management course for all high-school juniors and seniors. If you're past that age, picking up this basic financial skill will allow you to advise younger members of your family on how to graduate debt-free. Note If you must take out a student loan, it's generally preferable to take out federal loans rather than private ones. Federal loans offer lower interest rates, flexible loan repayment plans, and loan forgiveness programs. 4. Life Skills Although these chores may not seem to relate to finances, grocery shopping, cooking, cleaning, and other errands can save you a lot of money in comparison to dining out or using a meal-planning or maid service. With basic financial skills, you can find the best prices on food and fashions and plan practical menus to get you through college and beyond. Other skills, like doing the laundry, mending clothes, and performing simple car maintenance tasks on your own, can help prolong the life of your possessions, ultimately saving you even more money. Note Eating home-packed lunches instead of dining out can save you around $25 per week or $1,300 per year. 5. Investing Investing can be intimidating if you do not have at least a rudimentary understanding of how the stock market works and how to choose and invest in stocks. A basic investing class can make a huge difference in how you handle your money in college and as an adult. Learn basic investing principles in high school, such as asset allocation, diversification, and rebalancing, and you'll start your investing career ahead of the game. You can then jump-start your portfolio and perhaps even retire earlier in life. 6. Long-Term Financial Planning Understanding the need for a long-term plan for your money is a basic financial skill that you must master if you want to be financially secure in the future. So what does this mean for students, exactly? Beyond learning how to budget, it involves learning how to set financial goals, prioritize them, and develop a step-by-step plan for how to meet them. This process will lay the foundation for working toward major financial goals later in life, including paying off debt, saving for retirement, or buying your first home. 7. How to Build Credit and Manage Credit Cards While many college students are targeted for credit card offers, chances are high that they lack the knowledge on how to use credit cards successfully. They often view them as extra money instead of as a tool. That's because these students likely weren't taught how to use cards in high school; the Everfi study found that college students had particularly low success rates in answering basic questions about credit card use, credit history, and emergency funds. Of course, credit cards may be good or bad, depending on how you use them. But they are the downfall of many college students and young adults. The Everfi study found that 36% of surveyed college students already had over $1,000 in credit card debt. In addition to using credit cards, learning how to build credit and increase your credit score are basic financial skills. A good credit score can help you rent an apartment, qualify for lower interest rates on a mortgage or car loan, or even pay less for car insurance, so it's important to manage your credit from the time you graduate from high school and throughout college and beyond. 8. Renting an Apartment and Paying for Utilities Many students start their college careers living in dorms, which means that they do not need to worry about rent checks or managing other household bills such as utilities or cable. However, dorm life doesn't last forever, so it's important to learn how to rent and maintain an apartment and split bills with your roommates. Learning how to handle these tasks as a student can set you up for future success when you buy a home and must budget for the ongoing costs of homeownership. Frequently Asked Questions (FAQs) Why is money management important? Money management skills like budgeting help you to plan effectively for your financial future. Without a plan, you can easily overspend and miss out on opportunities to save money for retirement or other significant expenses. Planning also helps you avoid financial problems such as getting stuck in credit card debt. It puts you in control of your money so your money doesn't control you. What is the first step toward effective money management? The first step toward managing your money is usually to figure out how you're spending your money. Review and categorize your expenses, then evaluate how you're doing in each category and how much you're overspending. From there, you can build a budget and begin proactively managing your money. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. National Credit Union Administration. "Understanding a Check and Balancing a Checkbook." First Horizon Bank. "Understanding Your Balance." Federal Trade Commission. "Making a Budget." Chime. "How to Make a Budget: A Guide to Choosing the Right Budgeting Style." Federal Student Aid Office of the U.S. Department of Education. "Types of Financial Aid." Capital One. "Easy Ways to Save Money Every Day: Tips and Ideas." U.S. Securities and Exchange Commission. "Beginners’ Guide to Asset Allocation, Diversification, and Rebalancing." U.S. Department of Labor. "Savings Fitness a Guide to Your Money and Your Financial Future," Page 7. Experian. "What Are the Different Credit Scoring Ranges?" Experian. "Why Do Car Insurance Companies Base Their Rates on Credit Scores?"