My Money, My Future: Understand Your Results

Are you still in high school and hoping to find a part-time job?  Maybe you’re headed off to college and need a way to earn money to pay for school, or maybe you’re about to graduate high school and are considering beginning a career path.  No matter what your situation is, here are some important tips and tools for earning money.

Consider finding a part-time job or a paid summer internship. You’ll earn money, learn new skills, and develop good work habits to make it easier to get other jobs in the future.

• Start by creating your resume.  We Think Twice has tips and a sample resume for teens to help you show your worth.

• Create a cover letter to convince others you’re a good match for the job you want. 

• Read these 5 interview tips for teens to get ready for your job interview.   

• Make sure you have the documents you will need to prove you are eligible to work. 

• Know your rights. Read the Fair Labor Standards Act (FLSA) to learn more about the rules for youth employment. Depending on your age, there is a limit to the type of job and number of hours you can work. These rules vary based on your age, industry in which you work, and state where you work.     

Discover what kind of career appeals to you.  There are so many options.  

• Many careers require a bachelor’s degree, which can take 4 years to complete. Doctors, engineers, teachers, and social workers all have at least a bachelor's degree. If a bachelor’s degree interests you, read our tips under College and Financial Aid below. 

• Do you like working with your hands? Do you want to start working right away without building up much debt?  You could consider a career in a skilled trade. There are many options that offer great pay, job stability, and a good quality of life. You can become a mechanic, electrician, or nursing assistant without a 4-year degree. Find out more about locating a training program. 

• Explore a variety of careers or find tools to help you prepare with Youth Engaged 4 Change’s Education and Career Toolkit. 

Consider an apprenticeship program to gain skills while getting paid. It’s a great way to learn about a job and find out what skills you need. Sometimes you can even get credit toward a college degree for the skills you learn. 

Do you have an idea for a business? If you start your own business, you can be your own boss! But it takes a lot of hard work. You’ll need a business plan and preferably a mentor. Read this U.S. Small Business Administration Guide for 10 steps to start your business and get inspired.

Budgeting allows you to think about what you can afford and set limits on what you spend.  

• Start by listing the ways you make money — an after-school job, allowance, or gifts from family and friends.  

• Next, list all your expenses like clothing, gas, cell phone bill, or fun money. Include a category for savings and make saving a priority. 

• You can use online tools to set up a budget. Try this budget template from Google or this version from Microsoft.  

To get a good start on managing your money, open both a checking and savings account at a bank near you. It’s never too early to start saving for the future.

• If you have a job, select the direct deposit option when choosing how to get paid. When you're paid, your paycheck goes right to your checking or savings account.  

• Set up an automatic transfer of at least 10% of your paycheck into your savings account.  

• Getting into the habit of saving little by little will make it easier for you to build your savings over your lifetime. These savings can also contribute to a big future purchase, like a car! 

By investing some of your money, even if you have just a small amount to invest, you have the chance to make more money from what you invest. The most basic form of investing is to put your money into a savings account that earns interest. The bank pays you interest each month in exchange for having access to the money you keep in your savings account. The amount of interest the bank pays you can change from month to month.  

Other types of investments might include: 

• Bonds  

• Stocks  

• Real estate, such as a home, apartment, or land 

• Commodities (like gold or silver)  

When you invest in one of these options, you could make more money, but there is a chance of losing your money too. It is important to understand all the risks before you begin.  

You can protect yourself against risk by spreading your money across different investments. Then, if you lose money with one investment, your other investments can make up for the loss. This is called investment “diversification.” There are many ways to diversify your investments. It is up to you to figure out what strategy works best for you and the amount of money you are willing to invest.  Want to learn more? Check out this Introduction to Investing.   

Sometimes, you may need to buy something before you have enough money to pay for it all at once. It is common to take out a loan for expensive items like a house or car. Often, people will borrow money from a bank and pay it back with interest.  

• When you owe interest to the bank, it’s the price you pay to borrow the money and is a percentage of the amount you owe.  

• “Installment loans” are loans you pay back over time. For example, it can take about 72 months, or 6 years, to pay off the loan on a car. Until you pay off the amount you owe, it is your debt.  

Credit cards are another way to borrow money. When you buy something with a credit card, the amount you charge is your debt until you pay off everything you owe.  

• Your credit limit is the total amount of money you can borrow on a credit card. A credit limit of $500 means you have $500 in credit available to you. Credit card balances are one of the most common debts in America.  

• If you have a credit card, you’ll get a statement each month showing your purchases and what you owe. You can either pay the smallest payment or the full amount. If you pay the smallest payment, it can cost you a lot in interest charges and take a very long time to pay off the balance.

• Interest rates on credit cards are very high. Think twice before using your credit card unless you KNOW you can pay the balance in full as soon as you get your bill.   

No matter what type of debt you have, it’s important to make your payments on time. It shows the bank that you are responsible when it comes to managing money. 

• Banks report on your payment behavior to credit bureaus. If you are on time with your payments, your credit score will improve, and you will be able to borrow more money later.  

• Your credit score is like a report card for how well you manage money. Credit scores can range between 300 and 850. Scores 670 and above are good scores. 

• If you miss a payment, or if you have too much debt, lenders start wondering if you do not manage money well. Any missed payments will show up on your credit report and can drag down your credit score. 

If you plan to go to college or trade school after high school, it is important to know how to pay for your education. 

Some families set up a special savings account for education costs. These accounts allow you to earn interest on your savings. There are two main types of accounts:  

• A 529 Plan is state-managed and provides several options including a tuition plan and a savings plan. Learn more about different 529 Plans at the Consumer Finance Protection Bureau. 

• A Coverdell Education Savings Account (ESA) allows you or your family to contribute up to $2,000 a year to your account. The interest earned on the account is not taxed. To learn more, visit this Internal Revenue Service webpage. 

Another important way to pay for your education is by applying for financial aid.  

• The first step in applying for financial aid is to fill out the Free Application for Student Aid (FAFSA). Once you do, it means that federal, state, and college sources can consider you for lots of types of financial aid.  

• Aid opportunities include grants, scholarships, work-study jobs, and loans. The best part? The application is free!  

• It is important to know the federal and state deadlines for filling out the FAFSA. You should also know your college’s priority deadline. Even if you meet the federal deadline, your college could run out of aid, and you could miss out if you don’t apply early.

• Use this worksheet to gather the information you will need to fill out your form. This document shows you the step-by-step process for completing and submitting the FAFSA. 

Most colleges or trade schools also have their own opportunities for financial aid. If you are applying to a college, contact the financial aid office to ask about aid options and deadlines. You can also search for private scholarships by creating an account at CollegeBoard.  

• Part of the financial aid you receive could be in the form of a loan. Some loans depend on your financial need, and some do not. 

• A Federal Direct Subsidized Loan is a great option if you qualify. You don’t have to start paying interest until 6 months after you leave college (a time known as a “grace period”). 

• You should only look into private loans if you still have financial need and resources to repay the loan, after receiving federal student loans. To learn more about financial aid, visit Studentaid.gov. 

• Use this student loan calculator to keep all your loan info in one place and track your payments. 

Identity theft is a big problem. It happens when someone steals your personal information. An identity thief can pretend to be you and take your money. They might commit fraud and use your credit card information to buy things, or they might use your personal information to take out a loan. They might even take money out of your bank account. Did you know that young people are the most common victims of fraud?  

You can protect yourself from identity theft by following these steps: 

• Do not share your email, cell number, or other information in pop-up windows, quizzes, or unsecure websites. URLs that start with “https” have an added layer of security. 

• Be mindful about what you download from the internet. Viruses are often disguised as free music or movies.  

• If you get an email or text message from a company you do not recognize, or that is unexpected or unusual, do not click on any links in the message.  Instead, contact the company directly using contact information on their official website. Visit Phishing.org to learn how to protect yourself from phishing attacks.    

• Use long passwords with a combination of more than 8 letters, numbers, and symbols. Do not share your passwords with anyone. 

• Set up multi-factor authentication on money apps. These could include Venmo, Apple Pay, Zelle, and PayPal. 

• Do not carry your Social Security card around with you.  

• Watch your credit and bank account activity for fraudulent charges. Banking apps have notifications to make this simple and convenient. 

• Shred documents with personal information before throwing them into the trash.  

• Do not share your Social Security number, driver’s license, or credit card information.  

If you think you might be a victim of identity theft, talk with a trusted adult and ask for help. Together, you can take these actions: 

• Make a police report at your local police station.  

• Place a fraud alert on your credit report.  You can contact the major credit bureaus here: 

  • Experian 
  • Equifax
  • TransUnion 

• Make a report to the Federal Trade Commission or the FBI.  

• Close the affected account.