Family & Consumer Sciences

HOME

Kentucky High School Financial Planning Home Page

Back to E-Mail Updates page

HSFPP Weekly Update # 159—Post-Graduation Planning

Message from Bob: Graduation is coming up for high school seniors, and how they handle the next stage in their life financially is important. If you have used our weekly updates for long, you will know that those who develop good money management habits have a great advantage over students who leave college with loads of credit card debt. Student loans also can be crippling to young people who are beginning their careers; in fact, for many years after college, they may not be able to save the money they should toward their retirement. It cannot be emphasized enough that we should all begin our financial planning when we are young!

Message from Chris: With my parents’ help, I developed a budget before I went to college. As this proved valuable to me, I thought it would be helpful to present an update on the subject so high school seniors can do the same. Even if they are not going to college, they will still need to develop wise financial habits in the days ahead, as their parents will not always be around to help them.

 

Web Site Pick of the Week:

http://www.icpas.org/icpas/outreach/HandOuts.pdf

This excellent budget worksheet should be helpful for high school graduates who will be living on their own, whether at college or working.

 

In the New$... You’re Graduating, So Now What?

Your prom is over and soon you will be a high school graduate. You will want some time to relax, and you deserve it; but you also need to start thinking about the next stage in your life and how best to handle it financially. I’m in the same situation, except that I’m about to graduate from college.

Whether you are going on to postsecondary education or are entering the work force, you will need to do some planning and set your short- and long-term financial goals. How will you budget your money while in college or working on your own? Although it is difficult to estimate how much various items will cost, you can budget for some things. There will be many unplanned expenses of varied amounts, especially for entertainment, and you will need to budget for these. Vehicle, cell phone, and laundry expenses are some of the items you will need on your budget. Unless you will live in a dorm or at home, rent could cost more than your car payment. Know what you need and what you want so you can budget as accurately as possible. You can change your budget as needed once you begin your postsecondary education or work career.

I selected the University of Kentucky because I qualified for in-state tuition, as my parents went here, even though I graduated from high school in Maryland. This lowered my college expenses so that, by my junior year at UK, I could afford a used car and was able to live off campus. As a freshman, I chose to live in campus dorms so I could meet a lot of other students and so I would not need a car right away; but, after two years, I was ready for a change.

Those of you who are not going away for postsecondary education might find it wise to continue to live with your parents, so you will have the money to go away to school or for a down payment on a home or condo in a few years. You can then rent out your extra bedrooms to your friends so the cost of your housing might actually be free.

If you are going to work full- or part-time, make saving a priority. Pay yourself first. At your age, this is a great time to begin contributing to an IRA if you haven’t started one already. You may receive cash gifts for graduation and, unless you have a financial plan, you will be more likely to spend it, rather than using it to meet your financial goals. Whatever you do, be sure to spend less than you earn, as this is the way to save for your future and to be prepared for emergencies.

Comparison shop for the items you need. If you don’t already have a savings and checking account and a debit card, get all three. Checking accounts are a good way to learn to manage your money without getting into debt. Of course, if you bounce a check, this will cost you a lot of money and will hurt your credit rating, so be sure you have enough in your account to cover all your checks. Now is a good time to develop intelligent financial habits such as keeping track of your spending and investing. If you know where your money goes, you can make better use of it.

 

Discussion Questions:

1.) What financial challenges and/or obstacles does being on your own in either a postsecondary education or work environment bring?

 

2.) What can you do to succeed financially in the 4-5 year period after high school?

 

3.) Do you know what you spent your money on last week and last month?

 

4.) Do you think you could use money more intelligently if you kept track of how you use it?

 

Activity for Students:

Look at your short- and long-term financial goals. If you have already created goals for yourself, make any changes that you consider appropriate. If you have not developed financial goals, go to the HSFPP Portal page at http://www.nefe.org/hsfppportal/files/11210_Step%20One.pdf. Scroll down to Assignment 1.3.

Revise your spending plan for your life after graduation and keep track of spending with a budget sheet like the one at http://www.icpas.org/icpas/outreach/HandOuts.pdf.
It is the second PDF page on the site. At the bottom, in the larger blank column, write “Pay yourself first” or something similar in order to build saving into your budget. Savings should be the first thing you budget for; this is what “pay yourself first” means.

 

Kentucky High School Financial Planning Program

http://www.ca.uky.edu/fcs/hsfp

The purpose of the HSFPP weekly financial updates and Web site is to assist county Extension agents, credit union educators, high school teachers, and parents who home school their teenagers so that they may improve the economic well-being of our teenagers; and also to show educators how the HSFPP and the weekly updates meet Kentucky core concepts. The Web site and weekly updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators. The list of core concepts and order form for free program materials including the student guide and instructors manual can be found on the Kentucky HSFPP home page.