Very few high school students are financially literate. Many students have to learn tough lessons, when they step into their adult life, with the finances. While, personal finance might be a overwhelming subject to learn, so many students have developed many misunderstandings about money.
Below are the few misunderstandings
1. They cannot afford the college costs :
Most of the students are aware of the year on year increase in the college costs. Due to the increase in the college costs they try to skip the colleges and step out in the world to start earning. But they don't realize that, stepping out costs them more than completing the college and bearing the costs. As, after completing the college the work you get to earn will cover the costs you invested for college in the first year itself.
2. A person can save the amount which is left at the end of month :
It is never going to happen, that anything is left over at the end of the month. As money, always gets spent on something, if it is sitting there in your account. The money can only be saved, if it is directly transferred to some saving account or Fixed deposit or Recurring Deposit at the beginning of the month.
3. Budgeting is not for me :
The students who think budgeting is not for them, end up spending always more than their budget. While, at the end they start acquiring debt even before they start earning. Budgeting is important, as even small expenses can add up and can get you in big troubles.
4. Credit Cards are Bad :
Now this completely depends on you. If you are not able to control the spending done by the credit card, you should not own one. You can start with a credit card to borrow not more than 30 percent of the credit limit in each billing cycle and always pay the balance in full and on time.
5. All debts are bad debts :
Borrowing now to improve yourself will not be a bad idea. Students can go for education loans up to the amount which should not exceed the first year earnings of their first job. This will help them to achieve more in their education career.
Below are the few misunderstandings
1. They cannot afford the college costs :
Most of the students are aware of the year on year increase in the college costs. Due to the increase in the college costs they try to skip the colleges and step out in the world to start earning. But they don't realize that, stepping out costs them more than completing the college and bearing the costs. As, after completing the college the work you get to earn will cover the costs you invested for college in the first year itself.
2. A person can save the amount which is left at the end of month :
It is never going to happen, that anything is left over at the end of the month. As money, always gets spent on something, if it is sitting there in your account. The money can only be saved, if it is directly transferred to some saving account or Fixed deposit or Recurring Deposit at the beginning of the month.
3. Budgeting is not for me :
The students who think budgeting is not for them, end up spending always more than their budget. While, at the end they start acquiring debt even before they start earning. Budgeting is important, as even small expenses can add up and can get you in big troubles.
4. Credit Cards are Bad :
Now this completely depends on you. If you are not able to control the spending done by the credit card, you should not own one. You can start with a credit card to borrow not more than 30 percent of the credit limit in each billing cycle and always pay the balance in full and on time.
5. All debts are bad debts :
Borrowing now to improve yourself will not be a bad idea. Students can go for education loans up to the amount which should not exceed the first year earnings of their first job. This will help them to achieve more in their education career.
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