5 Things About Money I Wish I'd Learned in High School

If you've lived in the real world for any amount of time, these 5 things will probably not surprise you. But if you are still in high school, or in college and living at home, planning for the following money situations ahead of time may serve you well:

Pay yourself first. This means taking a percentage off the top of all money you receive -paychecks or otherwise - and either saving or investing it. I was with the majority of the population when I heard this and thought, "If I pay myself first, I won't be able to afford my bills." However, the real gem of this advice is that if you pay yourself first, you will have savings - and bill collectors will breathe down your neck until you pay your bills, which will compel you to get creative about coming up with more money (selling things on eBay, picking up a babysitting gig, writing articles for Associated Content, etc). Therefore, by paying yourself first, not only do you increase your savings but you also will find new ways to make money.

Learn how your credit score is calculated. I knew what credit scores were when I was in high school, but I never paid much attention to mine and I didn't realize how seriously I could hurt my score in my first few years. For instance, I had no idea that 35% of your score is based on late payments alone. If you want to keep your credit score clean, one of the best things you can do for yourself is ALWAYS pay your bills on time, even if you're only paying the minimum. You'll be glad you did. For more information on your credit score, visit www.myfico.com.

Start a Roth IRA account right away. Your age is your greatest asset. 20 or 21 is the perfect age to open a Roth IRA account, and with banks like ING Direct, you don't even have to have a huge deposit to open one, as long as you sign up for a direct deposit into your account each month. I started mine with $50 per month. Consider this - if you are 20 years old and put $100 in your IRA every month until you're 65, when you retire you'll have approximately $687,823. If you wait until you're 40 to save anything and try to play catch-up by putting away $200 per month until you're 65, you will only have about $221,578 when you retire. Be smart and use your young age to your advantage.

Everybody wants your money. This is where paying yourself first will save you from mountains of credit card debt. You may think you can calculate your bills for the year, but I guarantee that expenses will come up that you didn't consider, like these:

Your car insurance premium (it can come due when you are least expecting it)

Vehicle taxes and registration (this can be several hundred dollars, depending on where you live and what you drive)

Vehicle maintenance, repairs, towing costs, etc. (your car seems to sense when you're out of money and break down on cue)

Medical bills. Check your insurance - you may have a deductible of $2,500 or more if you are the only person on the policy. Family deductibles are usually closer to $5,000 (A deductible is the amount of money you have to pay out-of-pocket before your insurance kicks in)

Resist the urge to "charge it." If you are paying yourself first and being creative about ways to make extra money, and you still can't afford to pay cash, you probably shouldn't buy it. This is what got our parents' generation in a lot of trouble, and we don't want to suffer their fate. Consider this: if you live within your means today, you will have a lot more money in the future, and can buy luxury items that you want by paying cash. You'll save interest AND your credit score, you'll practice self-discipline, and you'll start to appreciate the belongings you have now.