A Little Too Late: Valuable Money Lessons You Wish You Learned in School but Never Did

Despite ample opportunities for a lesson in basic life skills in school, it’s evident many components of money management were not part of the curriculum plans. As a result, many Americans are forced to wing it throughout their adult life, hoping to learn valuable money lessons as the situations warrant. But housing crises and insurmountable national debt tell us that’s no way to live.

It’s clear financial literacy could use some work. In fact, 80% of adults agree they could benefit from advice and answers to everyday financial questions from a professional, according to the Consumer Financial Literacy Survey conducted by the National Foundation for Credit Counseling. Forget parallelograms and math proofs. They don’t exactly come in handy during tax season.

Years of learning on the fly have produced countless examples of valuable money lessons we wish we learned in school. But we’ll start by discussing the 15 most common. Read on. It’s never too late to learn something new.

1. The importance of saving early

andy warhol painting

Most were never taught the importance of saving money in school. | Adrian Dennis/AFP/Getty Images

The art of investing is another money lesson that would’ve been valuable to young adults trying to establish savings. Yes, socking away extra cash into a savings account at the end of the month is wise, but what many don’t realize is you can make money with money. One of the easiest ways to build wealth is to invest it and let it grow.

Making a $5,000 investment at age 25 can grow to more than $225,000 over 40 years with a 10% annual return in the stock market. Learning the importance of saving early is something all students would benefit from. Instead, many are introduced to this much later in life, when a good portion of their saving opportunity is already wasted.

Next: That pesky credit score

2. Your credit will affect everything you do

Credit score concept on chalkboard

Your credit score is like your shadow. It follows you. | iStock.com

A crucial money lesson not being taught in school is the concept of credit and how it affects almost every financial decision. It’s no secret that humans practice irresponsible spending like it’s their job. Only 20% of Americans have a credit score rated as “exceptional” by FICO. The average baby boomer or Generation X-er boasted only “fair” or “good” scores well into adulthood. Could many have fared better if they knew how to responsibly manage money from the start?

This tiny number determines what interest rates you can apply for and the money you can borrow for big purchases, such as cars and homes. It’s even a tactic used by employers to weed out irresponsible job candidates. Unfortunately, repairing your credit once damaged is often easier said than done.

Next: We’re talking taxes.

3. How to file tax returns properly

IRS service center

Schools should teach proper tax preparations. | David McNew/Getty Images

There’s a reason accountants make the salaries they do. It’s because no one else wants to deal with the hassle of filing their own taxes every year. Imagine looking at your tax form and actually knowing how to proceed in section B without asking Google first.

Most people waited until the last possible second to file their returns in 2017, Bloomberg reported. But that shouldn’t be surprising as many new workers and freelancers have little idea how to file properly. What if someone taught you how to file with confidence when you were young? Would the submission rate creep earlier than the April deadline? What a novel idea.

Next: The thing about interest we wish we knew

4. Compounding interest is a killer

United States currency shown on a fishing hook

Most don’t understand the interest of compound interest. | iStock.com/-BW-

Compounding interest can be a killer or a savior — a trap or the road to financial freedom. When it comes to loans paid off over time, compounding interest will double or sometimes triple your debts. On the other hand, depositing a chunk of money into an account could actually work in your favor, as compounding interest helps grow that amount year over year.

Matt Frankel of The Motley Fool tells USA Today, “I think every high school student should graduate with the knowledge that compound interest could be your best friend or worst enemy. If you’re borrowing money — especially on a credit card — most young adults (or even the older ones) don’t realize just how much it really costs.” By the time adults realize these caveats, it could be too late.

Next: Why many students faced a harsh reality after graduation

5. How to market yourself for a well-paying career

people waiting to interview in black suits

Self-marketing is an important skill that should be taught. | John Moore/Getty Images)

While many were being educated on the various U.S. wars and SAT prep tactics, no one felt like warning future generations of the uphill battle they’d encounter in the workforce. The basics of self-marketing — such as how to create a resume, how to demonstrate skills pertinent to employers, or ways to interview for a job — all fell by the wayside in school.

So much money is spent on getting an education relevant to a career path, but hardly any effort is spent to educate students on how to actually get said career. Without these skills, many Americans are left underpaid and underemployed.

Next: The basic principles of money management

6. The importance of establishing a monthly budget

woman withdrawing money from ATM

Money management is an important lesson. | iStock.com/guruXOOX

In terms of money management, one of the crucial lessons to be learned is understanding your cash flow. It’s simple to determine the amount of money coming in via paychecks but harder to determine when and where your money was spent throughout the month. The basics principles of keeping a record of financial transactions will take you far in life. It leads to healthy money habits many people lack.

Learning to manage monthly bills and live on a budget will come in handy if you graduate with student loan debt or face hardship landing that first paying job. Both of which are likely occurrences in today’s world.

Next: What about banking?

7. How to open bank accounts

Old bank sign engraved in stone

Banking can be confusing for young adults. | iStock.com/BrianAJackson

Instead of taking field trips to the zoo or aquarium, maybe schools and colleges should venture a voyage to the local bank to learn about proper banking skills instead. Many adults are unsure how to bank successfully and would probably benefit from further instruction. For instance, when is the proper age to open a bank account? Which accounts are best for you? And which bank fees must you budget for? These are all questions with answers that would’ve been useful to us years ago.

Next: How to protect your money from thieves

8. How to protect against identity theft

Bank robbers wearing masks

Identity theft is becoming more common. | Rockstar Games

Years ago, money wasn’t managed the same way it is today. Entrepreneurs became millionaires with the invention of budgeting apps for the common man, and banking institutions effectively transitioned into online banking for convenience. In the digital world, it’s easier for thieves to attack your personal information and commit financial or identity fraud. Now, older adults must learn to navigate technology safely, while teens and young adults must practice online responsibility. Knowing what information to share or keep private and how to create strong passwords could help thwart future hackers.

Next: The warning about payday loans

9. The dangers of payday loans

A pile of burning money

Payday loans are dangerous money pits. | NRCC

The dangers of costly types of borrowing are often skipped in school. Why didn’t anyone warn us about payday loans? Credit card debt can surely weigh you down, but menacing payday loans come with astronomically high interest rates, making it easy for debts to spiral out of control when managed incorrectly.

The National Foundation for Credit Counseling study reports almost 9 in 10 have taken out a payday loan or other type of short-term loan either for themselves or another person in the past year, which supports the need for increased personal finance lessons in school. In fact, the study found younger adults are more knowledgeable about payday loans and other loans than older adults. That’s a small bright spot in a dismal educational tack record.

Next: What college really costs

10. The true cost of college

Sad and worried entrepreneur working on line with a laptop

You’ll pay for college for years to come. | iStock.com/AntonioGuillem

Go to college, they said. Get a degree, they said. Society preaches the importance of a college degree, and without it your job prospects are doomed. What some now know in hindsight is a college education is not cheap. Even those who secure a financial aid package and a couple scholarships to help get them through school are locked into money problems. College is more than just tuition. It’s room and board, books, meal plans, and entertainment costs that further drive graduates into debt.

Loans carry consequences. It’s important to remember there’s no such thing as free money. When you accept money for college, that loan becomes a large monthly expense you’re committed to resolving for years to come.

Next: Student loans are for life.

11. Impact of student loans

alma mater sign

Studies show people don’t understand the terms of their loans. | Mario Tama/Getty Images

When it comes to student loans, 52% of millennials don’t fully understand the process, and 71% found the loan application process was more stressful than actually applying to school, according to a study by Citizens Bank. It seems parents of these millennials weren’t much help with the endeavor either, as they reported confusion and stress, as well. If only there were a college course that taught us how to repay our debts. Strategies for Tackling Student Loan Debt 101, perhaps?

It’s unfortunate the average American lacks a basic understanding of how loans work or how much they truly cost. Without this knowledge, young adults jump headfirst into borrowing money for college without any calculations of the ultimate sacrifice. They’re vastly unprepared to tackle their debt upon graduation, which carries through into the rest of their adult life.

Next: An important money lesson on lifestyles

12. The dangers of lifestyle creep

upper middle class houses in Louisville, KY

Beware of expensive lifestyle creep. | iStock.com/jnatkin

One of the most important money lessons has nothing to do with financial terminology or investment strategies. It’s about a lifestyle. People who get caught up trying to keep up with the Joneses find themselves in a serious money pickle shortly thereafter. Smart humans will focus on their own goals, budgets, and needs rather than worrying about impressing their neighbor with fancy cars and big toys.

Next: The key to making money last longer

13. How to make money last

wallet and money

Valuable money lessons include how to make your earnings last. | iStock.com/dolgachov

Many Americans are missing the importance of one key money principle: Earn more; spend less. Without learning how to stick to a budget and avoid impulse spending, many fall victim to living beyond their means.

Financial expert Dave Ramsey instilled these money lessons in his daughter at an early age, teaching her to always have a savings goal and that spending is good when you do it responsibly. His daughter explains, “I remember Dad walking me through situations that taught me opportunity cost, saying things like, ‘OK, Rachel, if you buy six packs of bubble gum right now, it will take you longer to save for the new Polly Pocket you wanted earlier today.'”

Next: No one teaches you how to ask for a raise.

14. How to negotiate a raise

Sean Spicer holding papers

White House press secretary Sean Spicer knows to come armed with proof to get what you want. | Drew Angerer/Getty Images

Because important lessons were overlooked in school, many key tactics of self-marketing remain unknown to today’s adults. Many are unprepared to ask the right questions during an interview, which leads to being underpaid for their worth.

PayScale notes women and millennials are least likely to ask for pay raises throughout their professional careers. It’s difficult to demonstrate your skills that warrant a pay increase without the knowledge to do so or the lesson on the importance of even trying. And higher wages over the course of a lifetime could be the difference between retirement and comfortable retirement.

Next: Rent or buy?

15. To rent or buy: That is the question

Downs house from HGTV Fixer Upper

How do you know whether it’s best to rent or buy? | Airbnb.com

Picturesque versions of the American dream tell us that buying a home is a rite of passage for successful adults. Many will bend and break all budgetary rules to finance a home. There are times when renting a home is a smarter choice than buying, but how would anyone know?

If schools taught money lessons centered on significant purchases and the impact of those choices on your future, maybe fewer people would feel strapped by unmanageable mortgage debt. Or more people would responsibly buy a house when it’s the right time and enjoy a more diversified investment portfolio as a result.

Follow Lauren on Twitter @la_hamer.

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