Money Moves: A Financial Literacy Guide for Students and Parents

Hiya, students and parents! Autumn is in full swing, and it's the season of gatherings, shopping, lots of spending, and, for my college-bound students, preparation for FAFSA.

That said, October is a great time to talk about money and learn a thing or two about financial literacy!

Let's start with a basic definition. Financial literacy?refers to an understanding that includes how to earn, manage, and invest money, and it has a critical impact on students' ability to make smart choices. The sooner students become financially literate, the more time they have to hone in, learn, and understand this important skill while practicing financial discipline to ultimately walk into financial freedom.

Financial freedom is always the goal! But let’s be real: many families are clueless about how to go about attaining financial freedom. Navigating a financial path from middle school to high school and beyond is a?big deal. Between preparing for college, trade school, or starting a career, there can be a lot to consider. But here's the good news—building financial literacy now?can set you and your students up for success later.

Today, we're breaking down some key financial topics that every student (and parent) should know, along with basic vocabulary and practical action steps that families can take together to increase their financial understanding.

Whether you're a middle schooler just getting your first allowance, a high school senior working a part-time job and planning for college, or a parent looking to revisit/learn basic financial principles, these tips will help you and your family make smart money moves.

First things first, let's talk about the most important driver when it comes to making money moves, which is our mindset, perspective, and thoughts on how we see, value, and approach money.

A Financial Literacy Guide for Students and Parents

7 Steps

Become Financially Free. Keep a Money Mindset.

Your attitude towards money plays a huge role in your financial success. It doesn't matter your background, whether you were born into money or barely have enough each month to afford food, let alone extracurricular activities and uniforms.

If you see money incorrectly, you will use and steward it incorrectly. Money is and always will be simply a means to an end, a vehicle, and a resource that can help to make things happen. When we view money as a source rather than a resource, things can get weird, leading to bigger problems.

Money shouldn't define us, and we shouldn't idolize it, or we'll always chase it.

Question: How do you and your family see money? Does anyone in your family struggle with a poverty mentality? A poverty mentality?is the belief that no matter what, you’ll never have enough money. It can cause people to avoid opportunities out of fear, become stingy, hoard, or feel stuck in a cycle of financial struggle. Poverty and limited mindsets often hinder people from achieving and believing that they deserve money.

To break free of these, you must start thinking like a financial champion, even if you don't feel like one (yet). So, how can we shape our minds in a healthy way around money?

Here's an action step and a fun activity to do with your parent or student.

• Write down your honest perspective on money and consider where it came from.
• Create a money vision board.?Print or cut out pictures representing your financial goals—whether it’s buying a car, going to college, or starting a business. This visual reminder will help you focus on possibilities rather than limitations.
• Remind yourself that money is a valuable tool and resource and that you can make and have more than enough.

Understand Future Earning Potential?

For students considering college or trade schools, understanding that money and career choices go hand in hand is super important. After all, we attend college, whether it's a university or a community college, for one of two reasons: either we love learning or (for the majority of us) to gain skills that will translate into experience for a future job opportunity.

As you start thinking about what you want to do in the future, it’s important to consider how your career path will impact your financial life. As previously mentioned, money is not everything and does not define us, but it does provide access. It’s a resource. Maybe you just want to help people and aren’t thinking about a high-paying job; this is admirable, but you’ll still need to take care of yourself in the future.?

Different jobs offer different salaries, and understanding your earning potential?can help you plan ahead. Not only that, but some careers come with extra costs (like certifications, degrees, or tools) that you need to be prepared to pay for. As you’re exploring careers, keep in mind that this isn't just about choosing something you love—it’s about finding a balance between passion, practicality, and your financial goals.

Here’s a keyword to learn.

• Salary is the money that someone is paid each month by their employer, especially when they are in a profession. Your employer may pay your salary every other week or on a monthly basis.

Pro-tip for students heading to college:

• Make a spreadsheet titled "Education Costs vs. Earning Potential" for forecasting purposes. Some careers require advanced degrees, which can mean more student loans and more debt. While pursuing your passion is important, you should weigh the cost of your education against the potential salary. If a career requires a lot of schooling but has a low earning potential, you may need to create a strong budget plan to manage loan repayment or consider another route to achieving your goal.

Family action step:

• Explore high-demand and high-growth fields for future job opportunities. Some careers, like those in healthcare, technology, and renewable energy, are growing rapidly. These industries often have higher earning potential and job security. Researching job trends now can help you find a stable career that matches both your interests and financial goals.
• You can shadow or interview professionals?in careers that interest you. Ask them about their daily responsibilities, but also dive into the financial aspects—ask, "What are some things you wish you knew beforehand about managing money when you started?" You can also ask how their job has impacted their lifestyle.

Learn Budgeting Basics

Now that we've dealt with your financial outlook, let's talk about budgeting basics. A budget is like a map for your money, and it’s never?too early to start one. As early as middle school, students can keep track of any money they've earned and how they've spent it.

When you know where your money is going, you stay in control. Knowing where your money goes also gives insight into who you are and what you consider important. So, pay close attention to your spending. As you prepare for college, begin your life, or embark on a career, the importance of budgeting increases. So, pay attention and learn as much as you can now.

Here are a few key steps to starting a budget.

• List your sources of income?(allowances, part-time jobs, gift money, and gift cards).
• Write down your expenses (lunch, video games, entertainment, clothing, and any savings).
• Subtract your expenses from income to see if you have any money left over. If you don't have any money left over, you might need to adjust spending! If you don't have any money yet, figure out ways to get some. If you are a middle schooler, you can ask your family to earn some money by helping out around the house or babysitting.

Pro-tip for students heading to college:

• Create a “college budget”?that includes tuition, textbooks, dorm costs, and personal expenses. Knowing this ahead of time can help you make informed decisions about part-time jobs or side hustles. You can also download our financial forecaster and financial aid and expense tracker here.

Family action step:

• Use a simple app like Wally?or GoodBudget?to track your spending, or go old school with pen and paper!
• Students might also design a mock budget to reflect their future financial goals. Parents, please assist the students in creating a mock budget. In this budget, students should forecast their future expenses, select two career options, one with a high income compared to one with a regular salary, use both salaries, and subtract expenses from each to determine what they will need to earn in the future to achieve their goals.

Understand Credit & Credit Cards

While learning about credit now may feel far off or like one of those adult things you’ve probably heard about but might not fully understand yet, now is a perfect time to get familiar. I'm telling you, the earlier you know about this stuff, the better. Think of credit as a promise—you’re borrowing money with the promise to pay it back. The key is to use credit wisely.

Here are some basic credit definitions:

• Credit score:?this number shows how trustworthy you are with borrowed money. Just like your grades, the higher, the better. It shows you are disciplined.
• Credit cards:?these can get you in lots of trouble if not used properly. Credit cards are not free money! I repeat, this is NOT free money. You will always need to pay back your credit cards—plus interest if you don't pay the full balance.
• Interest:?The extra money you pay for borrowing/using your credit. This is how companies get paid when you borrow. They are hoping you don't pay back on time so they can make more money off of what you owe.

Family action step:

• Practice building credit by becoming an authorized user?on a parent’s card. Parents, you can help jumpstart your students' credit-building journey by adding them as authorized users—helping to build your children's credit before they even have their own cards! Check with your credit card companies for specifics. While most credit card companies do not have an age requirement, some, such as American Express, do. To be added on AMEX a student must be at least 13 years old.

Save for Short-Term & Long-Term Goals

Saving is a big part of making smart financial moves. Yes, it can be tough, requiring lots of discipline, but it's also a game-changer with a nice reward. Whether you’re saving for a new pair of sneakers, concert tickets, a new phone, or college tuition, creating short-term and long-term goals will make saving a bit easier and more engaging. There's something inspiring about seeing your money pile up as you inch closer to your goals. Seriously, studies show that when we see progress towards something, it helps us keep the energy going.

Here's an example of different financial goals you may set:

• Short-term goals?can be what you want within a year (new phone, shoes).
• Long-term goals?can be the things that take time (college tuition, a car, your own apartment).

Family action step:

• Open a savings account.?Many banks offer accounts specifically for teens, and some even have mobile apps where you can watch your savings grow in real time.
• Set a weekly or monthly savings goal—even $5 a week can add up to a nice little chunk of change!

Think About Financial Aid, Student Loans & Debt Management

We don't have enough time to delve deeply into financial aid, student loans, and debt management today, so we'll keep it at a high level. But for more details and an in-depth look into financial aid, student loans, and financial literacy through a college lens, be sure to grab a copy of the College Bound book here.

For now, as we all know, college can be expensive, but there are many ways to afford it—without?drowning in debt.

Here's a quick overview of financial stuff for college:

• Typically, students pay for college through financial aid. You can?start by filling out the FAFSA?(Free Application for Federal Student Aid). FAFSA is the first step in gaining grants, scholarships, work-study, and loans.
• Scholarships: These are free funds to help pay tuition. You can apply for as many scholarships as possible—money is waiting! A lot of money goes unclaimed because students simply aren't applying for it. Websites like Fastweb?and Scholly?make it simple to find scholarships for which you qualify. You can also download our FREE scholarship guide here.
• Student loans:?Loans are sometimes necessary but can also be a major trap, so be careful to only take what you need (if you need them). You can learn more about different loan types at studentaid.gov. If you find yourself needing loans, again only borrow what you need, and always remember that you’ll have to pay them back with?interest. I am still paying back loans from over 20 years ago, so please avoid them when you can.

Family action step:

• Parents & students:?Research different loan types and financial options to be fully aware of what's available. If you are a high school senior or college freshman, research scholarship opportunities together?and apply early! Don't forget to download our free scholarship guide.?Finally, visit a few college websites to gain a better understanding of the cost of college. Also, research common fees and expenses for college freshmen. To avoid surprises down the road, speak openly about student loans, repayment plans, and everything else related to funding.

Learn About Investing

Investing is another way for students to save and grow their income. Investing isn't just for grownups; students can also benefit! Investing, in simple terms, is the process of putting your money to work so that it increases over time. Students and families can even begin with tiny amounts, which can lead to significant advantages later. While many 5th-8th grade and high school students may not be investing right now, learning some of the vocabulary is always a good first step toward future investments and financial literacy.

Here are some basic types of investments:

• Stocks:?Owning a piece of a company. If the company does well, your stock's value goes up.
• Bonds:?These are loans you give to companies or the government. They pay you back with interest over time.
• Mutual funds:?This is a mix of different stocks and bonds managed by professionals.

Family action step:

• Use beginner-friendly platforms like Acorns?or Stash?to start investing. Some apps allow you to invest small amounts, even spare change!

In conclusion,?every?student?is?building?a?financial?profile,?whether?they?realize?it?or?not. Students,?your?decisions?today?will?affect?your?finances?tomorrow. You're not too young to study and make smart money decisions. Parents, you play a vital role in guiding and encouraging these important lessons. Learning about money isn't just about making more of it—it's about understanding it, preserving it, and making it work for you so you can have a life full of opportunities.

Parents leading by example and making investments in your students' financial literacy and future, you could reap the rewards as well. With the right mindset, knowledge, and simple action steps, you can set yourself up for financial success and freedom. Have some fun with the activities, and consider financial literacy through the lens of graduation prep. Everything you're doing now is for a better life after graduation, be it high school or college. ?

Lastly, explore career options with your students with an eye on financial literacy so you're not just preparing for a job but also preparing for a life of financial security and independence. By aligning career, life, and college exploration with financial literacy, you and your students are setting themselves up not just for a job they love but for a life where you have the freedom and security to follow your dreams.

Let's celebrate a future where you're not just getting by—but thriving financially on the road to building wealth. I hope you enjoyed Money Moves: A Financial Literacy Guide for Students and Parents.

Keep learning, stay curious, and remember: it's never too early to take control of your financial destiny!

Xo,

Coach Rahk