Money Management Strategies for the New High School Graduate

You just earned a high school diploma, and life is about to change. Maybe you're headed to college, or perhaps you'll be attending trade school. Or maybe you're going to be working full-time to support yourself right out of high school. The important thing is to look toward the future - both short term and long term - and start off young adulthood by making smart money management decisions. Here are the money management strategies any high school graduate can use to ensure the brightest financial future.

The Most Important Principle: Spend Less Than You Earn

High school grads bring in money in countless different ways. Some of them work full-time, some hold down part-time jobs while attending school, and some may receive an allowance from parents as they start off life as an adult. However money comes into your life, your most important money management goal should be to spend less than you earn. Start now, and you're less likely to fall into poor spending habits. It's easy to compare prices and track spending, and money management is simpler now than it will be once you take on other responsibilities like buying a house, getting married, or starting a family. Start out with this primary principle, and the rest becomes easier.

Credit Is a Tool That Can Be Dangerous

Credit is a tool. Alone it is neither bad nor good. How you use credit determines whether credit helps or hurts you. Maybe your dad has a table saw: it saves massive amounts of time over the alternative, but in the wrong hands it can be extremely dangerous. Likewise, when you learn how credit cards work and what the dangers are, you can use credit as a positive tool in your life. Start small with credit, and don't take on new credit until you are certain you are handling existing credit wisely. That way, you'll start building a positive credit history that will help you tremendously when you need to borrow money later for major life milestones, like buying a house.

Start now: Sign up for Mint and learn the fundamentals of money management.

Start With a Simple Budget

It doesn't matter if you're living with parents while commuting to school, sharing an apartment with roommates, or living in a dormitory, a budget is great for preventing and correcting money problems. In fact, when you start adulthood knowing how to budget, you develop money management skills that set you up for long term financial security. Use a free budget app like Mint (which you can use on your smartphone too), and you can quickly set up a budget that's made exactly for your situation. Having a budget means you can make the most of every dollar that comes into your life. Budgets don't exist to cramp your style, but to empower you to make the most of your money.

Set Up an Emergency Fund

An emergency fund can start with a very small amount of money. They key is to start, and to add money as you are able. There may be months when you can only put $5 or $10 into your emergency fund, and you may wonder why you should bother. The reason is this: someday you'll need it, and money you can pull from your emergency fund is money you don't have to ask parents for or go into debt for. If you're self-supporting, keep adding money to your emergency fund until you have three months' worth of basic living expenses saved. Even if that seems impossible, however, adding a little to your emergency fund when you can is one of your smartest money management techniques.

Learning Now Is Less Painful Than Learning Later

If you get into the habit of budgeting and saving now, you'll have a much easier time later on, when responsibilities multiply and temptations to spend abound. Spend less than you earn from the start, and eventually it becomes second nature. Manage your credit cards responsibly from the moment they're in your wallet, and you're more likely to be responsible with them when you have more money (and more temptation to spend it).

Some high schools offer or require a basic money management class, but not all do. If you didn't receive basic money management training as part of your high school curriculum, you can start now, and you'll be glad you did. It's not that complicated, and it's something all adults have to deal with. Learning basic money management right out of high school is one of the best gifts you can give your future self.

Start now: Sign up for Mint and learn the fundamentals of money management.