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The Financial Concepts Every Recent Graduate Should Know

Photo by Federal Reserve Bank of Atlanta

High school is where students go to learn about topics like the fundamentals of quadratic functions, the various layers of the Earth, and Shakespeare. However, schools often fail to teach students about essential concepts they will actually need to know in order to thrive out in the real world. Topics like taxes, loans, and credit scores are usually not part of the school curriculum, but they’re vital to our financial health once we’re out of high school.

Whether you’re in high school, college, or somewhere in between, financial education is not something to take lightly since your entire future will depend on it once you’re out in the real world.

Here’s a list of basic financial concepts students don’t usually learn in school, but most definitely should:

Student Loans

These are loans granted by institutions to students who are in need of financial aid in order to pay for their tuition. Student loans are either federal or private. Some examples are the Free Application for Federal Student Aid (FAFSA) or Direct Subsidized or Unsubsidized loans. When picking out a loan, students should be aware of what the borrowing entails and should utilize resources like a student loan/salary calculator to plan out their financial future.


Taxes are a contribution imposed by the government that we have to pay in order to compensate for public services, such as roads, schools, judges and sanitary workers. Whether they’re income taxes taken out of your check or sales taxes when buying items from the store, everyone must pay taxes.

Credit and Debit Cards

Debit cards allow you to pay with money directly from your account. On the other hand, credit cards allow you to pay with money that the bank lent you. You’re expected to repay this money once the bank sends you a bill of your monthly expenses. You don’t have to repay the entire bill, however, it will be added onto your next month’s bill with extra interest, which can make or break your credit score.

Credit scores

A credit score is a number based on a level analysis of a person’s credit files, used to represent the creditworthiness of an individual. Credit scores are decision-making tools that help lenders anticipate how likely you are to repay your loan on time. Having a good credit score allows you to buy that dream apartment or brand new phone, as well as qualifying for a loan; and depending on the interest rate of the loan you qualify for, it could mean the difference between hundreds and even thousands of dollars in savings.


401(k)s are retirement payment plans sponsored by an employer. With this plan, workers are allowed to save a piece of their paycheck (often before taxes) and the taxes are paid only once the money is withdrawn from the account. Often times, your company will contribute money to your plan by up to 100 percent. For example, if you make $100,000 a year and you contribute 3 percent, that’s $3,000 in your retirement account.

While these are some of the most vital financial concepts, there are many others everyone should be aware of from a young age. After high school, students are often left to fend for themselves and learn from their experiences. However, leaving them to do so without even the most basic of weapons in their arsenal leaves them fully exposed in the already difficult transition. For now, all we can do is learn about these topics on our own, which shouldn’t be so hard given the numerous tools available out there.

0 0 575 26 June, 2018 Advice, Articles, College Life, Featured, Lifestyle, Money June 26, 2018

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