black people and money

Miss Money Sense: 6 Money tips for your high school graduate/college student

Miss Money Sense: 6 Money tips for your high school graduate/college student

By Teneshia “Miss Money Sense” LaFaye

Just the other day, I was chatting with a recent high school graduate about her college plans, and she shared that she is delaying her college entry until she moves into her first apartment in order to qualify for more student aid money. She also shared that she plans to apply for her first credit card.

Here is the advice I shared with her and more financial sense that high school graduates and college students should have:

1) Don’t be in a rush to move out of your childhood home because if you’re not financially stable you will end up moving back.

2) Save some of every paycheck, preferably 20% of what you bring home, because you don’t work just to pay bills and you need to save money for when you stop working some day. Trust me, your Social Security check won’t be enough to take care of you when you’re old.

3) Create a monthly budget by finding out how much it costs to live on your own, such as rent, electric, cable, phone, food, gas, insurance. These shouldn’t cost more than 60% of your take-home pay. The other 40% should be left for savings (20%), treating yourself (10%) and giving (10%).

4) Save at least 6 months of living expenses to save the day in case of an emergency, such as a broken down car, a broken tooth or an emergency room visit.

5) Credit cards aren’t free money, so don’t use them in an emergency because you won’t have the money to pay the balance off right away. Only use credit cards as a tool to establish good credit that you will need to finance a car, a future home or a business loan. Only use as much as you can pay back within 2-3 months. Never charge more than 50% of your credit limit.

6) Start investing soon because the earlier you start, the more time you have for your money to multiply. For example, a 21-year old who invests $5,000 with an average 8 percent interest rate can have $160,000 by retirement while a 30-year old who invests $5,000 would only have $80,000. Open a mutual fund account with a brokerage firm, such as Merrill Lynch, or a Roth IRA at your bank. If you also put half your annual tax refund into your investments, you can have $1 million or more when you retire.

This is just a sampling of the financial sense that high school graduates and college students should possess. More tips are included in my book Mom’s Money Lessons, which is available on my site,

Teneshia LaFaye is a former award-winning newspaper journalist and a nationally certified financial education instructor. She owns a health insurance agency and has written two books, What My Mom Taught Me About Money and Mom’s Money Lessons. Get her FREE daily money tips to work on improving your financial mindset by “liking” her MissMoneySense page on Facebook.

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