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Michael Srinivasan, who writes over at Stretch A Dime, gave me a copy of High School Money Hacks which he co-authored with Kyle Davis. He requested a book review and I immediately agreed. Then I suddenly panicked and went into severe nail biting mode. “What if it stinks?” I thought. Well, I wasted a perfectly good manicure for no reason because High School Money Hacks is an excellent book.
High School Money Hacks is for students but it’s also perfect reading for anyone who knows little about finance. While the material is straightforward, it’s geared toward an intelligent and mature reader who wants to learn. And it’s easy to recognize why this book is sorely needed at the high school level. A 2015 Gallup poll revealed that only 42% of those students they surveyed say they are learning how to save and spend money.
High School Money Hacks is presented in six sections:
- Time Value of Money
- Power of Compounding
- High School Money Hacks
- College Education
- Credit Report and Credit Scores
- Further Reading and Recommendations
Time Value of Money
The authors waste no time and jump right in with explaining the present value (PV) and future value (FV) of money. They assume we have some basic knowledge of Excel. If we don’t, they suggest we Google “Time Value of Money Calculator” for additonal tools. They “travel the timeline” with us in both directions, from PV to FV and from FV to PV in mathematical exercises. They stress that when we make any financial comparison we must use the cash value at the same point in time.
The Power of Compounding
This section contains the best line in the book: “Compound interest works better uninterrupted.” The authors caution against self-sabotage by taking money off the table from a compounding position and stress that compound interest works best over a long period of time. They introduce Annual Percentage Rate (APR), Effective Annual Rate (EAR) and Annual Percentage Yield (APY) to illustrate how loans and loan balances are calculated. The authors also explain inflation and its effects and they warn us that money is never really “safe” just sitting in a savings account.
High School Money Hacks
Everything in personal finance hinges on this question—are you a producer or a consumer? Become an expert at producing, the authors recommend, and you will become financially successful. This section offers a creative take on work, side gigs, hobbies, and work from home opportunities. The authors also illustrate how our paychecks are eroded by taxes and FICA. They provide an overview of IRAs, budgeting, and saving. And once again, the authors emphasize the power of compound interest and point out how time is the most powerful force in finance.
College Education
Here we get an analysis of college costs, the cost of education vs. potential income earnings, income gaps caused by lack of education, student loans, 529 plans, and scholarships. My favorite part here is “how much will you make?” The authors speak of loan debt vs. return on investment and point out how it makes no sense to spend $200K for college only to graduate with the capacity to make $35K.
Credit Report and Credit Scores
Here we learn how our credit report and credit score greatly impact our financial lives. The authors introduce us to the three credit reporting agencies and explain what goes into a FICO score. I appreciate that they direct us to annualcreditreport.com, which is the only legitimate site for obtaining a free credit report. They also caution us to be careful about every financial decision we make since one bad move may have a ripple effect.
Further Reading and Recommendations
High School Money Hacks concludes with several links to videos and guides on compound interest, budgeting, IRAs and insurance, as well as other resources.
Final Thoughts
A budgeting professor of mine in graduate school was incensed about the lack of financial education among her students. Consequently, she set aside her curriculum one evening to give a basic lesson in personal finance. She included budgeting, balancing a checkbook, and using credit responsibly in her primer. Yes—this was at the grad school level!
Obviously, finance is a missing link in our education system. Although many states now require that public high school students take a personal finance course before they graduate—many states do not. Various nonprofits and government agencies provide resources to teachers for developing a financial curriculum to bridge the gap, including Jumpstart.org, which publishes a National Standards in K-12 Personal Finance Education to further financial literacy.
In the meantime it’s the responsibility of parents to insure their children learn basic financial literacy. And High School Money Hacks is tailor-made for putting a teenager on the right path towards saving, investing, and using debt reasonably. I highly recommend this book and suggest that parents and teens explore the chapters and exercises together. And if you’re facing decisions about college costs and loans, take a look at this video from Dee-1.
Groovy Review: ☮️☮️☮️☮️
High School Money Hacks
By Karthigan Michael Srinivasan & Kyle A. Davis, ChFC
$4.99 at Smashwords
I will be buying this for my nephews and a couple of their friends. The local high school did have them in the initial Dave Ramsey course. Maybe not perfect but better than nothing. Their parents, my brother and I talk very openly with them about money and finances, especially our mistakes. No shiny gifts for birthdays and Christmas. Used to they got money for college, but now they get stock. They have to choose what they buy based on a few guidelines we give them. Even though we don’t buy stock for their friends some of their friends have listen to our conversations and heard the boys discuss their choices. So glad that about this book. Maybe Michael would consider doing this book in video game form. Then I know the boys and their friends would be all over it.
Thank you, Alicia! We did our best to make the book entertaining and appealing to kids showing real life scenarios and practical examples without sounding like a boring textbook.
Video game is a huge undertaking. I need to give it some thought.
Corner stone of finance is understanding the time value of money. The best way to understand time value of money is by getting your hands dirty by using an excel spreadsheet. There is honestly no other way around it.
–Michael
It’s great that your family openly discusses money with your nephews and that they’re getting stock rather than presents. I’m sure they’re learning some valuable lessons, Alicia.
The video game is a wonderful idea but Michael would probably need a larger company to cut a licensing deal with. The time and money involved in developing it might be a bit much.
Miss M I hope the book helps. If the kid wants the clothing and the cars now as a teenager, what will his sense of entitlement be like as he gets older? It’s tougher when they’re very smart since they have an answer for everything!
Oh my – the timing on this couldn’t be more perfect! My BF’s kid is 16 (the other 14) and so unmotivated to work. I keep explaining that if he wants to take girls on dates, use the car, and prepare for college he needs money!!! Still nothing. That being said, he wants the best of everything…especially clothes. My BF tells him “we pay for needs not wants” so instead he gets money from his grandparents and blows it all on clothes.
This kid is so smart in school that it all comes easy for him which is why I think he is lacking in motivation. Perhaps a book at this level will break through from the cerebral side that rules him. I’m willing to try anything!
Thanks for the recommendation, Mr Groovy, and great work Michael!
Looks like a great book, but tell me, how do you get a high school kid interested in reading it? My kid is very bright, involved in sports, newspaper, theater, but when it comes to topics like finance and politics, just “boring”. 🙁
Thank you, FIscovery! Often times, kids do what they see their parents do. My 10 year old wants to learn about finances because she sees me reading and writing on finances and discussing money objectively at home.
We, as parents, spend time on what my kiddo is interested in too. It is a two way street.
You could use every single purchase decision as a opportunity to teach personal finance. A simple question you could ask every time a purchase is being considered – would you rather spend your pocket money now or save it for something more meaningful at a later point in time?
What Michael says makes sense to me. I defer to him as I’m not a parent, but I do understand it can be a tedious process to get teenagers to talk about topics they’re not interested in. Thanks for stopping by, FIscovery!
This sounds like an amazing book! SO glad they wrote it. It hurts seeing the complete lack of financial education in most schools. And then we wonder why 76% of Americans are living paycheck-to-paycheck.
Thank you, Laurie! Yes, it certainly does. Slowly the trend is changing and the financial awareness is increasing.
–Michael
Thanks for commenting Laurie. There seems to be a movement (a slow one) underway to get financial education into the public school system. Let’s hope it builds momentum.
By making K-12 students more financially aware and responsible, perhaps a side effect will be to create adults who will hold their governments, national, state, and local, more accountable for some of the disastrous financial decisions they often make. One can only hope.
Couldn’t agree with you more, Mark. What an added bonus that would be to foster young adults who hold their government officials accountable. Thanks for your comment.
You bring up a great point Mark. I would go one step further. Hopefully, the next generation of people who hold these government positions go in with some financial acumen!
–Michael
Great review Mrs. G and congratulations on the book Michael! There is good movement to get more financial literacy into schools at this point (and a lot of that has to do with the student loan crisis). Great timing for books like this!
Thanks Vicki. Yes, Michael has done us all a great service with this book!
Thank you, Vicki! I appreciate it.
–Michael
I believe personal finance should be a required subject in high school. I think it’s great that Michael wrote on this topic, targeting this age group. The younger they get the information, the better! I wish I knew then what I know now, that’s for sure.
Kudos to you, Michael for writing and sharing this book! 🙂
I so agree with you about making finance a requirement in high school. Just learning about student loan debt and the proper handling of credit cards would produce young adults who are much more prepared to deal with the real world. Thanks, Amanda!
Thank you, Amanda! It is bizarre that personal finance has not been taught at school. I’m glad to see that it is slowly changing and getting better.
–Michael
Love the video!
I’m chairing a financial literacy committee with my local high school. We are well on our way. We have been tasked with coming up with our recommendations to present to the board of education in May. Our plan is to develop financial literacy curriculum for all grade levels. As well to make a personal finance class mandatory for graduation.
I’ll have to review the book as a possible resource.
Hi Brian,
I have been giving free copies of the book to schools and universities.
If you would like to review it and also share it with the school board for review, I can provide a watermarked copy. Let me know.
–Michael
Brian, I actually thought of you and your involvement on the committee when I was writing this. It would be wonderful if you could use Michael’s book as a resource!
Oh boy. If I had thought of money at all for the first decade of my career, I would be retired already, sipping something yummy far away on a beach somewhere. But I received no financial education, had to stumble onto it myself well into my 30s, so here I am. I’m glad that more resources are being made available to young people just starting out today. They are sorely needed.
I had no financial education either and first started learning in my 40s. It’s never too late! BUT how far ahead of the game we’d be now if we had received some basics when we were younger. Thanks for stopping by Mrs. B.
I LOVE that someone wrote this! I do wish I’d stumbled upon this book during high school. It’s such a tough time already, especially when you want to learn about money before you enter the “real world.”
Isn’t it great, Mrs.PP? We could avoid so much trouble if we had a primer such as this before entering college and/or the work world. Thanks for your comment.
Thank you! I wish I had known what I wrote about at 39 when I was 17 Mrs. Picky Pincher 🙂
Thank you for the fantastic review and your kind words, Mrs. Groovy!
–Michael
The pleasure was mine, Michael. I hope more people have an opportunity to read your book.
I wish that there were books like this when I was in high school! Well, I’m sure there may have been…but I had no idea about them. I am going to gift this book to every graduating high school senior that I know!
Me, too Mrs. Daisy! Thanks for stopping by. I’m so happy to hear you like the book enough to give it out as a gift!
Thank you, Mrs. Daisy! You made my day with your comment.
–Michael