As a high school student, managing money is the last thing on my mind. I spend it, but do not know how much I spend or how to make it grow. Now in my senior year, as I am preparing to take on student loan debt equivalent to a mortgage, it’s crucial that I learn how to manage my money.
Growing up in a financially limited family, I never splurged on anything. From a young age, I carefully watched my mom clip coupons. We saved every penny so that now, almost two decades later, there would be some money for my siblings and me to go to college. This meticulous spending has ingrained in me the value of money. I started to think of money as time spent. As a manicurist, every twenty dollars she gives me is an hour she spent scrubbing other people’s feet. When I imagine my mom working so hard doing at a demeaning job, the twenty dollar bill has much more value and I do not spend it recklessly. Because of this, I do not have careless spending habits, but even with good intentions, my money will not be able to grow without investments, something my family never had the opportunity to participate in.
During the Think Tank Challenge presentation, I was introduced to terms like Roth 401 K that I’ve never even heard before. Intrigued, I scribbled words down so I could look them up later. I’ve learned about some of these concepts before through programs such as Everfi, but during sophomore year, they were nowhere near as relevant to me as now. In about a week, I will turn 18 and be an adult. This means I need to start building a financial future for myself so I can afford to buy a home, live comfortably, and provide for my family.
Our coordinator, Rose Macias, encouraged us to start an emergency fund. I was shocked to learn most Americans do not have enough money to survive for three months in their bank account. This is a scary reality that my family faced when my dad got laid off during the economic crash in 2008. We had to scrape everything together and cut down. Birthdays became downscaled from a party to a slightly fancier family dinner. Living through that hardship made me plan for the long term. I am planning to save at least 10% of my income each month in order to prepare myself for the worst of these situations. I plan to raise the percentage when I become more settled in the future. I know from experience that when people get laid off because of the economy, it will be hard to find another job and it will take well over three months. Having financial security will help me have peace of mind. I can achieve this by only spending what I have left after I save instead of saving what I have left over. This will help financially prepare me for any hardships I may face.
During the presentation, I was also faced with the confusing finance world. Rose was throwing out words like deductible and IRAs that I never heard of before. They excited and scared me all at the same time. I was scared because I don’t know what they mean, but excited because I had a chance to learn. I want to learn everything I can about the financial world so that I can prepare myself and make the most of my money. I plan to open a Roth IRA as soon as I make my own money and put anything I can in it. Even if it’s a little, it will grow and help me during retirement.
Becoming an adult is frightening because I will have to face the world on my own, including securing myself financially. The Think Tank Challenge has forced me to think about the future and develop a plan. Because of the insight I gained, I plan to be proactive about my earning so I can keep up with inflation and survive in even the toughest financial problems.