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Anthony Zammit

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What were some things related to personal finance you wish you were taught earlier on in high school that you only learned later in life?

Until I took it upon myself to learn about personal finance and future growth of my own wealth, I was never taught at any point how to save, how to make a budget, how to invest my money properly.... I would spend my money on everything shiny and new. While my parents were the only ones telling me to save my money because "money was king," I had no reason to believe them as I was not hearing it from anywhere else. I thought they were crazy! Boy was I wrong.

Finally I took it upon myself to figure things out and how the world of personal finance / wealth worked. It's pretty simple actually but takes lots of dedication and a change of habit. Here are my personal finance tips I would tell my younger self:

1) Pay yourself first. No matter what lays ahead, always pay yourself first. This forces you to create a savings account for your future. It also makes you find ways to make money to make sure your expenses will be covered. Be it selling junk laying around or another part time job.

2) Interest is your friend. Your money needs to work for you. Invest in something that will generate you more than what you put in.

3) "Never" buy new. Always try to find something slightly used as depreciation on new objects is your biggest enemy. Be it a car, new computer, or the likes. Yes there is always an exception to this rule, but for the most time we could be just as happy if it's not "New In the Box"

4) Budget Budget Budget. Make one, give yourself goals and stick to them.

5) Get full use out of your purchases. Drive them into the ground as they say. Do not upgrade or change unless it's really time to. Always wanting the new one or changing your mind on what you bought will cost you a fortune. Again, always exceptions to the rule but for the most part, if your happy with what you bought, use it until it can't be use any more.

6) Don't rent, don't lease. Own your stuff. You will not regret.

What would you suggest?

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  • Benjamin Loke

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    Oct 18 2011: i don't remember anything specific but i just wish we were taught the basics

  • Kai-Xin Young

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    Oct 18 2011: I was taught how to do complex interest rate, debt payment and commission calculations before I started high school. It wasn't until after high school that I knew how these things applied to my life. I didn't know that I actually accrued interest in my savings account since I was 5. These things were all abstract. I didn't actually know what commission or mortgage was and how/when people got them. I just knew how to calculate repayments, installments, etc.

    What use is teaching students to do such calculations, if you don't relate it to its applications? I wish this was addressed in high school.
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    Helen Hupe 30+

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    Oct 17 2011: Gee........the one thing I wish I had known in HS but did not learn much later is that I am just as valuable as any other human being. I wish my life stance had been I AM OK / YOU ARE OK.

  • Chongjian Wen

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    Oct 16 2011: I hope I could be taught how to manage my money and how to spend wisely...I guess once people are getting finacially independent, those who possess a better mindset or ability of a wise financial management do lead a more productive life...we are not necessarily to be taught how to make investments in stock markets, which would be too much for us teenagers, but a concept of how to make reserves for future demand............
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    Jom Bunsiri

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    Oct 14 2011: Benefits of personal finance and basics of how to manage personal portfolio.
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    John Locke

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    Oct 11 2011: I am still very young (not even in high school yet, however, my opinions are still valid :) but I have a large intrest in economics. What I have realized from watching my peers is that most of them think of the stock market as a place where people lose money. To them it is risky and expensive.

    I believe many teens could benefit from learning how to use the stock market, when to buy/sell, what to buy/sell in good/bad times/ how to think when buying stock, and if you are in it for long term or short term.
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      Damon Samuel

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      Oct 11 2011: Jake, given your age I personally would recommend a low cost index fund. There are some you can invest as little as 25 dollars a month in. It does not sound like much and with the volatility currently in the market it may flucuate some. But over the course of time as you continue to put 25 dollars a month in, you will start building a sizable balance.

      If anyone tries to sell you a market timing scheme or something that promises rates of return that are guaranteed or larger than 10% per year, they are trying to take advantage of you.

      Dollar cost averaging small amounts of money will not make you fabously rich, it will allow you to develop a nice sum of money if given enough time. And time is clearly on your side right now.
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        John Locke

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        Oct 16 2011: I appreciate your concern, and right now I am only interested in buying stocks and shorting stocks. I also have my parents to advise me on purchases that may be scams.

  • Charity Callahan

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    Oct 10 2011: I have been discussing this topic ever since the CBC had Gail Vaz-Oxlade on their programing talking about her new book Money Smart Kids. http://www.gailvazoxlade.com/books.html . The areas of finance that I really wish I was exposed to as a kid would be, mortage/equity, managing money for growth (not survival) and cashflow. The theme of finances that I would have appreciated to learn about would have been how to not be guilty for having money and growing it. Perhaps I would have been less likely to be scared about ensuring I kept on acquiring the debt I wanted to have and encouraged to keep it growing.
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    Anastasios Avranas

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    Oct 10 2011: Im not sure whether what is learned in high school or college has to do with the implementation of it to real life. I feel that no matter how many things we learn during our school days, nothing compares to the experiences after that. And for the experience we cannot do much apart from living those.
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    Damon Samuel

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    Oct 10 2011: I was lucky; when I was fresh out of school I trusted what little savings I had to a big name brokerage and believed they had my best interests at heart. I lost virtually everything. In reality it was not a lot of money but I now consider it an investment in my personal education.

    I don’t necessarily agree with some of your points, especially stated as absolutes but I do agree with the sentiment. If we wish to become economically self sufficient we need to make better financial decisions.

    The biggest piece of advice I would give to someone still in high school is to find a good textbook on personal finance and study it. I’m not talking about Napoleon Hill, Robert Kiyosaki, or Thomas Stanley; I am referring to any actual text book that is required in a certified financial planner program. The goal is to learn more than simply balancing a budget or understanding how compound interest can help or hurt your goals. The goal is to learn how to apply risk management techniques to your finance to weather the bad times and improve your position in the good ones.

    I am disheartened by all the financial pain and suffering I see people going through and I shake my head at how many of them were living paycheck to paycheck prior to the Great Recession.

    Several years ago I saw a retirement piece and the financial writer wrote a line I have quoted many times, I just wish I remembered who to give credit too. “Failure is not a singular event, it is the accumulation of poor decisions and poor thinking.” I believe the reverse to be true as well and that in the long run getting lucky or unexpected setbacks will even out and you can have financial success if you consistently make good decisions.
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