5 Things You Never Learned In School

School

We’ve all had that thought. Stuck in a class thinking to yourself, “I am never going to use this information ever again.” In fact I distinctly remember thinking this while I was in a geometry class. To me, I knew that engineering wasn’t in my future, nor was calculus, or a variety of other subjects.

If you know me, then you know I am an extremely practical person. Sure, I enjoy theory and thinking about abstract ideas, but I want practical knowledge. Something to get my head around. I’m positive I am not alone in this.

So with that, here are five things I wish I was taught in school, but if you understand them, you are ahead of the curve:

How to live on less than you make
Sounds simple right? Well, it is when you are younger, until you grow up and realize you were never taught how to survive on a $30,000 income. But you still need to remember the very fact that you should always spend less than you make. If you can’t support your current lifestyle then either cut expenses or get a side job.

How to build a budget
I wish I knew this before I graduated high school. How else do you know where your money goes? I have written about how much I love Mint.com, a great tool even if you aren’t into spreadsheets such as the one I gave out to my email readers. It’s never too late to learn how to build a budget. Over time Mint becomes powerful as it tracks your spending  and shows you trends about your spending habits.

How to use a credit card
All I can say is why isn’t there a class on this? All I remember being taught is that we need one. (Which isn’t necessarily true) A credit card is a tool. If used successfully it can provide you with rewards; I’m not talking just the rewards the credit card company offers. By using a credit card wisely it translates into a good credit score which leads to lower financing for bigger ticket items. This ties into number one. By living on less than you make you can use a credit card wisely and pay it off every month.

Understand what all the stuff on your paycheck means
What do you mean you don’t know what FICA is? Most employees pay into social security along with medicare, hence the 7.5% being withdrawn from your paycheck. There are also an array of other items such as health deductions, federal and state tax withholdings and hopefully retirement plan contributions. How often do you adjust your W-4? Exactly, that can be a real problem come tax time, if you are over or under withholding your taxes. (W-4 is the form to adjust how much your employer takes out of your paycheck for federal taxes). Seems like one lesson would have solved this knowledge gap…

Give, give and give more
Something I have been learning recently. School again, likes to discuss how success comes from hard work. What they never teach you is what it takes to stay successful. That is giving. Giving money, time and advice. Helping others around you professionally and personally leads not only to great relationships, but shapes your heart to become less greedy. In essence it helps keep all the above lessons in order. Giving helps reduce the need of things, which means spending less than you make, which leads to better budget management and credit card use.

This is by no means a definitive list, but a guide to what has helped shaped my understanding of finances. This is the base, and if you have a strong base you can slowly start to build off of it.

What else do you wish you learned?

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